Zimbabwe MPs raise concerns over high interest rates despite falling inflation
By staff writer, Parliamentary watch
Debate in the National Assembly recently turned to the cost of borrowing after Parliament considered a report by the Portfolio Committee on Budget, Finance, Economic Development and Investment Promotion on the 2026 Monetary Policy Statement (MPS), with legislators warning that current interest rates remain too high for businesses despite falling inflation.
The report was presented to the House as a motion by Hon. Lincoln Dhliwayo and seconded by Hon. G. Hlatywayo, following the Reserve Bank of Zimbabwe (RBZ) Governor’s delivery of the 2026 MPS on 27 February 2026 under the theme “Deepening domestic currency usage to consolidate price and exchange rate stability.”
In its submissions, the committee said stakeholders broadly welcomed the monetary policy direction as a credibility-building instrument meant to safeguard disinflation, defend exchange-rate stability and consolidate confidence in the domestic currency. The committee pointed to a sharp decline in annual ZiG inflation from 95.8% in July 2025 to 4.1% in January 2026, describing low single-digit inflation as key to protecting purchasing power and improving economic predictability.
However, the committee flagged the decision to maintain the Bank Policy Rate at 35%, arguing the level appeared “excessively high” relative to inflation and was keeping credit out of reach for productive sectors. MPs and the committee noted that ZiG lending rates were being priced even higher in the 40% to 47% range making working capital and investment financing costly for industry, while USD lending rates were reported to be much lower.
During debate, MPs urged a careful recalibration of the policy rate to better reflect current inflation trends, saying stability should translate into investment and production growth. The committee also referenced regional and international comparisons in arguing for a more proportionate interest-rate stance.
Among its recommendations, the committee called on the RBZ to gradually reduce the Bank policy rate in line with inflation by 30 June 2026, while remaining alert to liquidity conditions and the risk of renewed inflationary pressures.
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