The central bank governor Dr John Mangudya has added his voice to ongoing economic debate on the adoption of national interest rate policy to influence certain macroeconomic variables to bring financial stability to the economy.
Interest rate policy is one of the most important aspects of any economic system as it influences the cost of borrowing, the return on savings and are an integral component of the total return on investment as well as the provision of insight into the future economic and financial market activity.
It is against this background that the central bank governor feels the economy is giving a distress call that needs the adoption of an interest rate policy to act as a stimulus strategy to realise positive economic activity in the medium to long term.
“We believe the adoption of an interest policy will steer the economic ship forward as lowering them will increase credit expansion to boost the economic activity,” said Dr Mangudya.
Adopting a progressive interest rate regime will boost productivity, investment, capital inflow and increase exports to realise enhanced growth rates in the shortest possible time.