THE Reserve Bank of Zimbabwe (RBZ) has raised interest rates by 20 percentage points, to contain rising inflation, which is at 72 percent for March.
The bank’s monetary policy committee (MPC) said the main bank policy rate had gone up from 60 percent to 80 percent.
With higher interest rates, the RBZ hopes to make it less attractive for people to borrow money, especially for ‘speculative purposes.’ It is now more expensive to get a bank loan.
RBZ last raised rates at the MPC’s last meeting on October 28, increasing it by a similar 20 percentage points.
RBZ is also lowering its quarterly reserve money growth target from 7,5 percent to five percent. This means that the central bank will now release local currency onto the market at a slower pace.