RBZ propose interest rates of 8% per year

RBZ propose interest rates of 8% per year
Published: 28 January 2014
The Reserve Bank of Zimbabwe monetary policy committee says the proposed interest rate structure of 8% per annum should be utilised as a benchmark for other debt in the market.

The RBZ monetary policy committee, which met on the 23rd of January to deliberate on the structure of the interest rate and the proposed yield curve for Zimbabwe, resolved that the proposed interest rate structure should be used as a guide for other debts in the local market.

The proposed yields of 6.6% for 91-day instruments, 7.2% for 180-day instruments and 8 percent for 365 days instruments are envisaged to sanitize the country's interest rate structure which has curtailed deposit and credit growth.  

According to the committee, the yield curve will be adjusted from time to time in line with macro-economic developments notably, foreign interest rates, domestic inflation and country risk profile.

Market analysts contend the current interest rate structure is distorted as evidenced by the wide disparity between deposit and lending rates.

Lending rates quoted by banks range between 6 percent and 35% per annum, with most banks quoting average lending rates of around 20 percent.

Meanwhile, in a statement the apex bank says the eagerly anticipated 2014 monetary policy statement is set to be presented on the 29th of January.

The Acting RBZ Governor, Dr Charity Dhliwayo, who will present the monetary policy statement, faces a daunting task as most of the challenges which have affected the financial services sector notably liquidity constraints, low depositors confidence and the absence of interbank market have to be dealt with. 
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