Browsing: Zimbabwe freezes bank lending

• Before Mnangagwa’s statement, the Zimbabwean currency was officially valued at 165.94 to the US dollar, but it was trading on the black market at a rate ranging from 330 to 400 to the dollar
• Investigations found that many enterprises are simply borrowing significant sums of Zimbabwe dollars, which they then channel into the parallel market to acquire US dollars
• The president proposed issuing an order to compensate account holders who lost the value of their assets when the country de-dollarized in 2019

Zimbabwe ditched its depreciated currency in 2009, preferring to utilize foreign currencies, notably the US dollar. Mnangagwa’s administration revived the native currency in 2019 to float alongside international currencies in the economy, but the local currency continued to lose value.

As a result, President Emmerson Mnangagwa has instructed banks to cease extending loans to the government and private sector departments, claiming that the unprecedented action was intended to …