Zimbabwe News Update
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News / NationalRBZ policies, not banks, driving high lending ratesby Staff reporter13 mins ago |16ViewsThe Reserve Bank of Zimbabwe’s (RBZ) regulatory policies, rather than commercial banks’ practices, are the main drivers of the country’s persistently high lending rates, financial experts have warned.Speaking during the fourth edition of the In Conversation with Trevor Ideas Festival, currently underway in Nyanga under the theme “The Future of Human Capital, Innovation and Ethics in the Age of AI,” industry leaders pointed to restrictive central bank policies as the root cause of costly credit in Zimbabwe.The festival, convened by Alpha Media Holdings (AMH) chairman Trevor Ncube, brings together thought leaders from various sectors to discuss the country’s economic and developmental trajectory.
AMH publishes NewsDay, Zimbabwe Independent and The Standard, and operates Heart & Soul TV.The experts said that while the RBZ’s tight monetary stance aims to curb inflation, it has also created an environment where banks are compelled to lend at unsustainably high rates.Currently, the RBZ’s benchmark policy rate stands at 35%, a level many market participants have criticised as excessively restrictive.Responding to questions on how his institution sets lending rates, TN CyberTech Investments Holdings Limited chief executive officer, Tawanda Nyambirai, said the statutory reserve requirement was a key factor pushing rates upward.”When you deposit money, there’s a percentage that must sit at the Reserve Bank as non-interest-bearing funds,” Nyambirai explained.”At the moment, about 35% of deposits are taken and placed in a Reserve Bank account earning zero interest.
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