Due to a SHORTAGE of Zimbabwean dollars, businesses and people are currently experiencing a severe liquidity crisis.
According to experts, the lack of demand for products and services is to blame for the liquidity crisis.
This is in response to an order from the Reserve Bank of Zimbabwe that the government should halt payments to its suppliers while the Finance ministry looks into vendors who are pegging prices using the rate of the black market.
In order to manage the money supply and stabilize the spiraling inflation, which has been listed among the highest in the world, the government also froze payments to contractors.
Gold coins were also introduced by the central bank to absorb surplus market liquidity and stop inflation from rising.
Given that the local currency is Zimbabwe’s legal tender, economists warn that a persistent shortage might cause the country’s economy to crumble.