The Reserve Bank of Zimbabwe (RBZ) has lifted an order temporarily suspending lending by local banks with immediate effect.

The RBZ, however, clarified that the lifting of the suspension did not apply to institutions that are currently under investigation by the Financial Intelligence Unit (FIU) for allegations of abuse of loan facilities.

Last week, President Emmerson Mnangagwa ordered an immediate freeze on bank lending, saying the move was aimed at stopping speculation against the Zimbabwean dollar which was rapidly devaluating on the black market.

RBZ governor John Mangudya also defended the action noting that it was temporary and aimed at contain inflation and stabilising Zimbabwe’s economy.

Experts had warned that the order threatened the very survival of the country’s banks and result in a ripple effect on the economy, including causing shortages of goods, additional price increases and job losses.

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