The Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) cut the Bank policy rate by 250 basis points to 27.5% with immediate effect, citing benign inflation and strong growth prospects, while stressing that the move was a policy-rate realignment rather than monetary easing. The rate had been held at 35% through March before a 500-basis-point cut in June. The MPC also lowered the Targeted Finance Facility rate to 12.5%, capped banks’ all-inclusive on-lending rate to productive sectors at 22.5%, and left differentiated statutory reserve requirements unchanged. Annual ZiG inflation rose to 3.7% in September from 2.9% in August but is expected to remain below 7% at end-2026, while economic growth is projected at 5%, supported by mining and agriculture, and reserve money remained within targets agreed with the International Monetary Fund. Foreign-currency reserves backing ZiG exceeded USD2 billion, equivalent to about two months of import cover, while stronger inflows supported exchange-rate stability. Renewed international oil-price increases amid escalating Middle East conflict drove the latest inflation uptick. The MPC said further policy normalisation would depend on prevailing monetary and financial conditions, including risks from geopolitical tensions and forecast El Niño conditions in the 2026/27 agricultural season.
Source: 2026-09-28Reserve Bank of Zimbabwe
Reserve Bank of Zimbabwe Cuts Policy Rate by 250 Basis Points to 27.5%
The Reserve Bank of Zimbabwe’s Monetary Policy Committee cut the Bank policy rate by 250 basis points to 27.5% with immediate effect, describing the move as a realignment rather than monetary easing. It also lowered the Targeted Finance Facility rate to 12.5% and capped banks’ all-inclusive on-lending rate to productive sectors at 22.5%, while leaving statutory reserve requirements unchanged.