Bloomberg
Zimbabwe’s lenders, which include units of Standard Bank Group Ltd and Ecobank Ltd, appealed to the central bank to raise interest rates that have been capped at 12 percent for the past two years, saying this would increase lending in the collapsing economy.
They also proposed that the Reserve Bank of Zimbabwe introduce an overnight rate to facilitate lending between financial institutions and the central bank, Bankers Association of Zimbabwe (BAZ) submissions seen by Bloomberg show.
“The BAZ recommends lifting of the interest-rate caps,†the lobby group said in correspondence with the central bank. It would “allow for proper risk-based pricing of loans.â€
The appeal by the banks come as Zimbabwean Finance Minister Mthuli Ncube, appointed in October, and central bank Governor John Mangudya attempt to revive the economy by paying back domestic debt and abandoning an insistence that a currency used only in Zimbabwe, the RTGS$, trade at par with the US dollar. The inflation rate, at 59 percent, is at its highest since 2008 and there have been shortages of bread and fuel.
A fuel-price hike in January sparked the worst urban riots since 1995.
The BAZ said an overnight rate would allow banks short of cash to obtain funding from the central bank. An interbank market would further stabilise interest rates, it said.
The BAZ also said it expects the government to honor Treasury bills worth RTGS$ 2.2 billion ($726 million) that mature in 2019.