Zimbabwe’s President Emmerson Mnangagwa implemented capital controls to control the rapid depreciation of the currency.
The Zimbabwean dollar has lost half its value this year, making it Africa’s worst-performing currency.
Annual inflation rose from 72.7% to 96.4% in April.
In a televised speech, Mnangagwa ordered banks in the country to “The current partial dollarisation or dual currency system shall continue as the Government’s preferred system of payment and transaction within the domestic economy under a carefully managed de-dollarisation process lending by banks to both the Government and the private sector is hereby suspended with immediate effect, until further notice,”
According to the government statement, the decision to stop speculation against the Zimbabwean dollar was made and was part of a series of measures to stop the rapid devaluation of the black market.
Zimbabwe reintroduced its local currency in 2019 after abandoning it in 2009 when hyperinflation hit.
The devaluation of the black market exchange rate of the Zimbabwean dollar increases inflation.
