Online Reporter
Rutendo Nyeve, [email protected]
THE Reserve Bank of Zimbabwe (RBZ) has reduced the bank policy rate from 35 percent to 30 percent with immediate effect.
The decision, which is expected to enhance economic growth, was announced on Tuesday following the Monetary Policy Committee (MPC) meeting held on Monday.
The move is underpinned by what the central bank described as a structural shift to a low and stable inflation environment.
The policy rate is the benchmark interest rate set by the central bank to guide the cost of borrowing in the economy. It is a primary tool used to manage inflation and influence economic activity.
A high policy rate makes borrowing more expensive for banks, which in turn raises the cost of loans for businesses and individuals, thereby cooling spending and inflation.
Conversely, a reduction in the rate makes credit cheaper, encouraging investment and consumer spending.
For ordinary Zimbabweans, the latest cut is expected to translate into lower interest rates on loans and overdrafts.
The move is expected to benefit businesses and individuals seeking credit for working capital, expansion projects and personal investments, thereby stimulating economic activity and supporting livelihoods.
RBZ Governor Dr John Mushayavanhu said the decision represents a strategic realignment rather than a reversal of monetary policy.
“The MPC underlined that its decision to reduce the Bank Policy Rate does not entail easing monetary policy at this stage, but a realignment of the Policy Rate to the structural shift in inflation dynamics,” he said.
The MPC noted that inflation has remained in single digits, below five percent, since January 2026, down from a peak of 95,8 percent in July 2025.
The committee commended the Reserve Bank for anchoring adaptive inflation expectations and maintaining price stability.
The MPC also welcomed the reduction of the Targeted Finance Facility (TFF) interest rate from 20 percent to 15 percent, in line with the policy rate adjustment, to further support productive sectors of the economy.
The reduction will cap banks’ on-lending rates to productive sectors at an all-inclusive interest rate of 25 percent.
Statutory reserve requirements were maintained at 30 percent for demand deposits and 15 percent for savings and time deposits.
