HARARE – The Reserve Bank of Zimbabwe (RBZ) on Wednesday said it would cut its main lending rate to 15 percent from 25 percent effective May 1 as part of measures to help the economy deal with the effects of the coronavirus outbreak.
The economy was already experiencing its worst crisis in a decade, with fast rising inflation and shortages of food and other basic goods.
RBZ governor John Mangudya said there was “expectation that banks will do the same to provide affordable financial facilities to their customers during these challenging times.”
The apex bank said it was also lowering the interest rate applicable to the medium term bank accommodation (MBA) facility from 15 percent to 10 percent per annum.
“The MBA facility has been increased by ZW$500 million to bring it to ZW$3 billion. An additional ZW$2 billion will be raised from the market through money supply neutral financial instruments to augment the MBA facility to ZW$5 billion,” Mangudya said.
Mangudya said banks that access the MBA facility were “encouraged” to on-lend at interest rates not exceeding 20 percent.
“The above measures will provide further impetus to the resuscitation of production in the economy,” the governor said.
