HARARE (Reuters) -- Zimbabwe's central bank governor raised the country's main lending rate by 200 percentage points to 500 percent in a drive against skyrocketing inflation and a severe economic crisis.

Central bank governor Gideon Gono also said Zimbabwe's major financial houses -- commercial and merchant banks, building societies and discount houses -- had met a Sept. 30 deadline giving them nearly a year to raise their capitalization to $10 million.

"In fine-tuning the monetary policy, with inflation reduction as the over-riding objective of the central bank, it has become necessary that additional resources be implemented for us so as to stabilize the economy in the medium term," Gono said in a statement.

"With immediate effect, the central bank has raised the accommodation rate from 300 percent to 500 percent for secured lending and from 350 percent to 600 percent for unsecured lending," he added.

The central bank's secured accommodation rate is also known as its bank rate, at which it lends money to commercial banks. On July 30, Gono slashed the rate by 550 percentage points to 300 percent, citing a need to balance "the virtues of anti-inflation demand management and the continued flow of credit to the productive sectors of the economy."

But Gono warned a month ago that interest rates were likely to be raised again to tame galloping inflation.

The southern African country is grappling with a deepening recession widely blamed on President Robert Mugabe's government and making itself felt through record inflation, shortages of foreign currency, fuel and food, and grinding poverty.

Its inflation rate of 1,204.06 percent is the world's highest, while unemployment has vaulted to more than 70 percent as companies either fold or are forced to downsize.

The crisis has been worsened by Zimbabwe's isolation from the international donor community, mainly over policy differences especially Harare's controversial seizure of white-owned commercial farms for redistribution to blacks.

Zimbabwe's central bank also on Monday ordered the immediate closure of all money transfer agencies, citing poor performance and "defiant behaviour".

"With immediate effect, all money transfer agencies are cancelled," Gono said in a statement.

Institutions whose money transfer licenses were cancelled included Standard Chartered, Banfords and Stanbic Bank. "All local accounts for these entities should be closed forthwith. This withdrawal has been occasioned by non-performance and defiant behaviour by most players in this sector."

Gono said that any bank wanting to appeal against the withdrawal of their transfer licenses had only until the end of the month to do so.

The southern African country is trying to revive its tattered economy, which is plagued by high unemployment levels, poverty and the highest inflation rate in the world.

The problems stem partly from the country's isolation from its former trade partners in the West after Zimbabwe embarked on its controversial land reform programme in early 2000.

Many of the three million Zimbabweans who have left the country as a result of the economic meltdown regularly send back foreign currency to their families from abroad, a vital source of cash for those left behind.