Captains of industry and commerce have urged the Reserve Bank of Zimbabwe (RBZ) to lower its bank policy interest rates downwards to between 80 and 100 per cent from 200 per cent.
They say this will enable businesses to have access to affordable financing.
Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer Christopher Mugaga said companies are now being forced to borrow in United States dollars due to high-interest rates, which he said threatens their viability. Said Mugaga:
In the upcoming monetary policy statement, we expect interest rates to be reviewed downwards to margins between 80 and 100 percent this is because as private sector we understand that the rate of inflation is still a threat to the overall macro-economic stability, but having it come down to those levels will at least give us a breathing space.
Right now, most of the companies are borrowing in US dollars and it’s not sustainable at all.
RBZ governor John Mangudya is expected to present this year’s monetary policy statement next month.
In its third quarter of 2022 business and economic intelligence report, the Confederation of Zimbabwe Industries (CZI) said:
… an interest rate of 200 percent compounded monthly effectively eliminated ZWL$ borrowing, as businesses could not afford such high borrowing costs.
While speculative borrowing was reduced (which also helped contain the growth of money supply), the policy virtually eliminated borrowing in local currency as a way of finance and reduced industry expansion prospects.
Persistence Gwanyanya, a member of the RBZ Monetary Policy Committee said:
Certainly, the forthcoming monetary policy will be presented before the end of next month but a date has not been set as yet.
One of the expectations from industry and commerce is the downward review of interest rates from the current levels.
In December, as the MPC we postponed the review of the interest rates on account that there should be sustained currency and inflation stability, if sustained stability is there by the time the monetary policy statement is presented, the interest rates will be reviewed downwards.