The Bank’s Monetary Policy Committee (MPC) met on 24 April 2020 and deliberated on a number of issues including the impact of Covid-19 on the economy and the necessary policy interventions to ensure that the economy remains on a growth trajectory. The MPC noted the compelling need to reinforce the Bank’s first-round of economic policy responses to the Covid-19 pandemic and made the following resolutions:
- The Bank Policy rate will be reviewed downwards from 25% to 15% per annum with effect from Friday, 1 May 2020, with the expectation that banks will do the same to provide affordable financial facilities to their customers during these challenging times.
- The interest rate applicable to the Medium-Term Bank Accommodation (MBA) Facility will be reduced from the current 15% to 10% per annum with effect from Friday, 1 May 2020.
- The MBA Facility has been increased by ZW$500 million to bring it to ZW53 billion.
- An additional ZW$2 billion will be raised from the market through money supply neutral financial instruments to augment the MBA Facility to ZW55 billion.
- Banks that access the MBA Facility are encouraged to on-lend at interest rates not exceeding 20%.
The above measures will provide further impetus to the resuscitation of production in the economy.
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