Two-tier interest rate regime to foster productivity and stability

By Davison Vandira

ZIMBABWE’s monetary authorities are optimistic about strengthening productivity and stability through the central bank’s two-tier interest rate policy regime.

The year 2022 will mark the second year of The National Development Strategy One which is anchored on real economic productivity and enhanced macroeconomic stability hence the central bank has come up with a two-tier interest rate policy regime to support this vision.

It is against this background that the Reserve Bank of Zimbabwe is committed to eliminating macro-economic imbalances by implementing a real interest rate regime to avoid speculative borrowing and channel resources for productive purposes.

“The year 2021 was a learning curve and it is now incumbent upon the RBZ to implement the lessons learnt last year in as far as achieving stability is concerned and it is therefore not surprising that the RBZ is following a two-tier interest rate policy one for productive purposes and the other one being a punitive one to stifle speculation borrowing which increases money supply growth unnecessarily,” said Persistence Gwanyanya RBZ Monetary Policy Committee Member.

Through the Medium-term bank accommodation sixty percent interest rate policy, financial institutions have successfully managed to offer the productive sector monetary support in excess of five billion Zimbabwe dollars to date.

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