Zimbabwe has introduced a law prohibiting banks from giving loans, a move authorities say is intended to stop speculation against the Zimbabwean dollar.
This is bad news for Zimbabwean officials and companies who can no longer take loans from local banks. By law, the government is now prohibiting banks from providing loans. The aim of this measure is to stop the devaluation of the local currency on the black market.
Year-on-year inflation reached 96.4 percent in April, up from 60.6 percent in January. Today, the Zimbabwean dollar is officially quoted at 165.94 to the U.S. dollar. On the black market, a U.S. dollar trades for between $330 and $400.
Reintroduced in 2019, the Zimbabwean dollar has fallen sharply due to international conditions and the recession in the Zimbabwean economy.
President Emmerson Mnangagwa believes that this situation is largely caused by anonymous speculators. These speculators borrow Zimbabwean dollars at interest rates below inflation and use them to trade in foreign currency.
In 2015, Harare took the historic decision to abandon the local currency because of the economic crisis the country was going through and especially because of hyperinflation.
After momentarily losing its monetary sovereignty, the government asked the population to use eight foreign currencies, including the U.S. dollar, the Chinese yuan, the Indian rupee and the South African rand, which ultimately became its official currency.
CD/odl/fss/abj/APA