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In a move designed to stop speculation against the Zimbabwean dollar and as part of raft measures to stop rapid devaluation on the black market , government has extended the suspension of lending of both local and foreign currency units by an array of financial institutions to also cover corporates and individuals .
President Emmerson Mnangagwa on Saturday announced measures he said were meant to arrest the currency’s depreciation, which he said threatened Zimbabwe’s economic stability.
“Lending by banks to both the government and the private sector is hereby suspended with immediate effect, until further notice,” Mnangagwa said in a statement.
In a statement to financial institutions , the Apex Bank said no new credit facilities should be issued as the temporary suspension covers new loans .
“We bring your attention to paragraph 40 of the Presidential Announcement on the suspension of lending by banking institutions,building societies , development finance institutions , deposit -taking and credit – only micro finance institutions to the government and private sector ,” said the Reserve Bank of Zimbabwe.
“ For the avoidance of doubt , this suspension relates to all lending , whether local currency or foreign currency , to Government and the private sector including corporates , other legal entities and individuals.
“ We further confirm that no new credit facilities should be issued as the suspension covers new loans , undrawn portions of agreed facilities overdrafts and other forms of borrowing instruments , by whatever name they are called.“
The central bank also emphasized that with respect to pipeline transactions where all the facility terms and conditions have been met before the above pronouncement , institutions may approach the Reserve Bank for consideration on a case- by case basis.”
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