Zimbabwe’s financial sector is expected to continue offering affordable lending rates to industry and commerce after the monetary policy committee of the Reserve Bank of Zimbabwe (RBZ) resolved to maintain lending rates at 35 percent.
The Monetary Policy Committee ( MPC) of the RBZ held its third meeting on Friday, where the need to provide cheap borrowing costs aimed at stimulating production in the economy emerged as a key element.
While the industry was further expecting an interest rate hike on the back of the prevailing economic climate, it has however been offered with another relief following the recent cut in the interest rates to 35 percent from 70 percent.
The MPC resolutions released by its chairman, Central Bank Governor, Dr John Mangudya this weekend, revealed that the need to maintain the interest rate policy was made after an anticipated drop in the month on month inflation rate for November.
According to the resolutions, the committee directed the central bank to link its reserve money targeting framework with the 2020 national budget to avoid the effects of the budget’s expansionary impact on the money supply.
The recent introduction of bank notes has also led to a decline in cash premiums or charges according to the monetary policy committee.
While members of the monetary policy committee will meet on January 17 next year, market watchers expect measures aimed at increasing production.