Online Reporter
Business Reporter
Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) has cut the Bank policy rate from 30 percent to 27.5 percent with immediate effect, bringing the total reduction since June 2026 to 7.5 percentage points, but maintained a tight monetary policy stance and insisted the move does not signal monetary easing.
In a press statement issued after its meeting, the MPC said the reduction represented a “realignment of the policy rate to the observed inflation dynamics” against a continued benign inflation environment and the need to support the economy’s strong growth prospects. It said it had embarked on a gradual path of monetary policy normalisation, while maintaining a tight monetary policy stance, with the pace of adjustment to depend on prevailing monetary and financial conditions.
The committee also reduced the interest rate on the Targeted Finance Facility from 15 percent to 12.5 percent, in line with the policy rate cut, while capping banks’ all-inclusive on-lending rate to productive sectors at 22.5 percent.
It maintained differentiated statutory reserve requirements at 30 percent for demand deposits and 15 percent for savings and time deposits, and kept minimum interest rates on savings and time deposits at their current levels.
The MPC said it would continue issuing the ZiG-denominated Term Deposit Facility (ZiGDTDF) to support development of a short-term yield curve for local-currency instruments and promote domestic savings. It commended strong uptake of the facility in the second quarter of 2026, saying it had provided positive returns on local-currency savings and helped economic agents preserve the value of their savings and incomes.
The committee noted that a strong external position had supported the accumulation of foreign currency reserves backing ZiG, which exceeded US$2 billion in September 2026, equivalent to about two months of import cover. Increased foreign currency inflows had also improved availability in the interbank market, underpinning exchange-rate stability within the ZiG25–27 per US$1 range in 2026.
It also positively noted Government and Reserve Bank performance under the IMF Staff Monitored Programme, saying all quantitative targets and structural benchmarks were fully met for the first and second reviews.
The MPC said it would continue monitoring risks from heightened global tensions and forecast El Niño conditions during the 2026/27 agricultural season. It would seek to balance risks to inflation and growth while ensuring inflation expectations remained firmly anchored in the short to medium term.
