RBZ Offers Modest Relief On Borrowing Costs, Cuts Policy Rate To 30%

The Reserve Bank of Zimbabwe (RBZ) has reduced its policy interest rate by five percentage points to 30%, a move that falls short of expectations from businesses that had been hoping for a deeper cut.

The central bank has maintained a tight monetary stance since September 2024, when it raised the rate from 20% to 35% in an effort to stabilise the ZiG currency following a sharp devaluation.

In its latest announcement, the RBZ Monetary Policy Committee said the adjustment “does not amount to monetary policy easing”, but rather reflects a “structural shift in inflation dynamics”.

Inflation data shows a significant slowdown, with annual ZiG inflation easing from 95.8% in July 2025 to 4.4% in May, while US dollar inflation remains at 2.8%. Despite this, the central bank said it continues to take a cautious approach, warning it remains “vigilant to emerging risks”.

The policy rate serves as a key benchmark for lending rates across the banking sector, meaning a cut can ease borrowing costs for businesses. However, with the rate still at 30%, credit remains relatively expensive, limiting relief for the private sector.

“The Bank policy rate was reduced from 35% to 30%, consistent with the structural shift in inflation dynamics,” said RBZ Governor John Mushayavanhu in a statement on Monday, 15 June.

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