By Alois Vinga
STANDARD Chartered Zimbabwe (Stanchart) has applauded the decision taken by the Reserve Bank of Zimbabwe (RBZ) to maintain lending interest rates at 10 % saying the move will go a long way to bolster industrial productivity.
The Mid-Term Monetary Policy Statement delivered by the RBZ recently states that the bank’s overnight accommodation of 40% and the medium-term lending rate for the productive sector of 30% will be maintained in the short term, in order to control money supply and curb speculative activities.
The document said a cap on the interest rates at which banks can on-lend the proceeds from the medium-term lending facility would also be maintained at 10% above the lending rate.
Presenting financial performance for the six months ended June 30 2021, StanChart’s chief executive officer, Ralph Watungwa hailed the decision, concurring with the central bank that it will go a long way to stimulate economic growth.
“We welcome the decision to maintain current monetary and fiscal policies which will promote economic stability at least until the end of the year. Notably, the 2021 Mid-Term Monetary Policy Statement maintained interest rates for overnight accommodation and Medium Term lending for the productive sectors to control money supply.
“The cap on interest rates at which banks can lend drawings has been maintained at 10 % above the borrowing rate to stimulate recovery of the productive sectors of the economy,” he said.
The development comes at a time when capacity utilisation in the manufacturing sector is projected to rise to 61% by the end of 2021, from 47% last year.
Meanwhile, during the period under review, StanChart achieved a profit after tax of $632 million compared to $682,4 million recorded in a comparative period last year.
“The quality of the loan book has remained sound despite disruption caused by the Covid19 pandemic. Non -performing loan ratio was significant at 0.002%.reading from 0,005 % as reported as at December 31 2020,” StanChart board chair, Lovemore Manatsa said.
He added that the balance sheet remains strong, highly liquid and well capitalized compared to minimum regulatory requirements.