Zimbabwe's unpredictable economy has claimed its first victim since reforms were implemented by the country's Reserve Bank, late last month. An asset management company has closed its doors, unable to pay investors, and several others are teetering on the edge of a liquidity crisis.
Interest rates, which soared to beyond 600 percent before Christmas, appeared to have dropped to between 200 and 300 percent Friday, but they remain about four times higher than in the last three years.
The increase in interest rates has taken its first victim, E-N-G Asset Management, which handled hundreds-of-millions of Zimbabwe dollars' worth of investments for a range of clients.
The government-controlled Herald newspaper reported that the company's directors had been summoned to the central bank before Christmas, but failed to show up. The company's telephones went unanswered Friday
Meanwhile, Trust Bank, one of Zimbabwe's newer large banks, announced, in a statement released to the media on Wednesday, that it has no liquidity problems.
The bank's statement appeared to be prompted by fears expressed within the financial sector that it might not be able to meet its obligations.
A pro-government weekly publication, the Business Tribune, said Friday that Trust Bank and five other banks also were in financial trouble.
The governor of Zimbabwe's Reserve Bank, Gideon Gono, said he would clamp down on speculators in the financial sector when he announced his new monetary policy.
The Business Tribune said Mr. Gono had pumped billions of Zimbabwe dollars into several banks that are under threat.
Mr. Gono was not immediately available for comment Friday.
While interest rates were kept artificially low, many companies and new businesses borrowed heavily, and now find themselves in trouble trying to keep up to date with their loan repayments.
Before Christmas, some retailers were changing prices daily, to keep up to date with the sudden spike in interest rates in early December. Many are now offering up to 40 percent discount on goods because, they say, increased interest rates mean they can no longer afford overdrafts.
The management at a major hardware and building suppliers outlet in Harare said Friday the company had to wipe out its overdraft immediately by discounting goods and clear the overdraft within a week, or face bankruptcy.
Several financial analysts said Friday E-N-G Asset Management would not be the last casualty in Zimbabwe's increasingly chaotic financial sector.