Zimbabwe Economy in Freefall, Banks Ordered to Suspend Lending, Inflation Increases to 96 Percent in 4 Months

Zimbabwe Economy in Freefall, Banks Ordered to Suspend Lending, Inflation Increases to 96 Percent in 4 Months

  • The Zimbabwean government has halted lending by banks to the state and the public in an attempt to slow the country's currency's depreciation
  • Year on year inflation rose to 96.4% in April, up from 60.6% in January threatening to drop the economy into freefall
  • The Zimbabwean dollar is trading at 400 Zim dollars to one US dollar on the black market, more than double the official exchange rate

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HARARE - The Zimbabwean government ordered banks to stop lending to the government and public with immediate effect. Year on year inflation has risen to 96.4% in April from 60.6% in January.

This was done in an effort to prevent the weakening Zimbabwean dollar from losing any more value. The currency is rapidly losing value against the US dollar in the black market.

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President Emmerson Mnangagwa, Zimbabwe, Inflation, economy
President Emmerson Mnangagwa has ordered banks to halt lending immediately. Photo credit: @edmnangagwa
Source: Twitter

Official exchange rates quote the Zimbabwean dollar at 165 against the US dollar. However, on the black market, a US dollar is worth 330 - 400 Zimbabwean dollars.

At the beginning of the year a US dollar was worth 200 Zimbabwean dollars. President Emmerson Mnangagwa announced that the move was made to stop the currency's depreciation which directly threatened Zimbabwe's economy according to SABC News.

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He accused speculators of using Zimbabwean dollars to trade in forex after borrowing from the banks at below inflation rates.

In addition to the suspension of lending, taxes have been increased on forex exchanges and levies have been increased on withdrawals of over $1 000 according to Bloomberg.

"Must be a mistake": Woman shares cooking oil price of R98, gives SA chest pains

Earlier, Briefly News reporters that a woman named Dimakatšo Camilla Supe was taken aback by the new price of cooking oil and simply had to share it with peeps on Twitter.

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Dimakatso posted a pic of a 2-litre bottle of oil that was charged at R98 and said:

"This thing was R23 not long ago."

Twitter peeps had mixed feelings about Dimakatso's findings. Some were convinced that the store may have made a mistake while others felt that the price was correct. People even shared their own experiences with grocery shopping and lamented over how much they had to pay.

Source: Briefly News

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