Reserve Bank of Zimbabwe cuts policy rate as inflation eases
The Reserve Bank of Zimbabwe RBZ has reduced its benchmark Bank Policy Rate from 35% to 30%, citing sustained low inflation and improved price and exchange-rate stability in the first half of 2026. This decision follows a drop in annual ZiG inflation to 3.2% in July from 4.7% in June. The RBZ also lowered the interest rate on its Targeted Finance Facility from 20% to 15%, while maintaining a maximum all-in lending rate of 25% for productive sectors. The central bank expects this lower policy rate to encourage banks to reduce their lending rates. Foreign currency inflows increased by 47.8% to US$10.72 billion in the first six months of 2026, exceeding payments of US$7.3 billion. Foreign currency reserves reached US$1.7 billion by the end of July, providing 1.7 months of import cover. The ZiG traded stably against the US dollar, and the economy is projected to grow by 5% in 2026, supported by agriculture, mining, manufacturing, and services. The RBZ noted that the transition to a mono-currency system remains conditions-based and market-driven, with current progress at a weighted 50.1% towards meeting the necessary conditions.
