THE Reserve Bank of Zimbabwe(RBZ) has slashed interest rates from 150 percent to 130 percent per annum in response to changing local and global dynamics.
The development, which was announced in yesterday’s Monetary Policy Statement is expected to attract a positive response from the private sector and borrowers.
According to the RBZ, the move is in response to changing local and global economic dynamics which include current exchange rate and economic stability as well as the slashing down of expected global growth rates from 3.8 percent to 3 percent.
The Bank has also removed all special dispensations on foreign currency retentions by putting in place a 75 percent retention ratio for all export earnings.
The move is in response to a reduction in foreign export receipts from 4,5 billion United States dollars in the nine months to September last year to 3,6 billion United States dollars to September this year.
This is due to external inducements, mainly the weakening global prices of Zimbabwe’s export commodities such as platinum, nickel, and lithium.
To promote the usage of banking and financial products, RBZ encouraged banks to open local cost accounts where the removal of the Intermediate Money Transfer Tax (IMTT) is being considered.
“Financial institutions are encouraged to scale up financial inclusion through the opening of more no-frill (low-cost) accounts. This measure will promote more usage of banking services and financial products, including increased use of bank cards, digital financial services and other cash-lite means of payment in the economy, it is recommended that the Government considers removing the Intermediated Money Transfer Tax (IMTT) on transactions that are intermediated through plastic bank cards and other digital platforms,” reads the statement.
The Bank also noted that it is pleased by the uptake by the transacting public of the ZIG dual currency which was introduced on the 5th of this month to preserve value.