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RBZ slashes interest rates

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Story by Owen Mandovha, Business Reporter

INDUSTRY has welcomed the move by the Reserve Bank of Zimbabwe (RBZ) to slash interest rates by 25 percent as a major relief in terms of reducing borrowing costs and spurring more economic activities.

The slashing of interest rates from 200 percent to 150 percent was one of the major highlights of the Monetary Policy Statement released by the Reserve Bank of Zimbabwe this Thursday, in a move meant to synchronise lending rates and inflationary trends.

The industry says the high-interest rates were stifling business by way of high borrowing costs; hence the latest move is a huge relief.

Economist Mr Batanai Matsika said, ‘‘There was a general outcry when interest rates were high increased to 200 percent which obviously was a major cost driver for business. Though the cut was not to our pleas, it is a step in the right direction.’’

Another major intervention in the Monetary Policy Statement was the increase of foreign currency retention rates to 75 percent across the board which industrialists believe will sustain operations.

President of Zimbabwe National Chamber of Commerce Mr Mike Kamungeremu noted, ‘‘It is a major response to the outcry of exporters that there was an element of double taxation by retaining more exporters’ foreign currency receipts. At 75 percent, the Central Bank has responded well as companies will be able to have more foreign currency at their disposal.’’

It also emerged that the country recorded US$11.6 billion in foreign currency inflows in 2022 a major boost to the country’s efforts to increase foreign currency circulation in the economy.