StanChart applauds RBZ for keeping interest rate on loans at 10%
By Alois Vinga
STANDARD Chartered Zimbabwe (Stanchart) applauded the Reserve Bank of Zimbabwe (RBZ) decision to keep loan interest rates at 10%, saying the move will go a long way in boosting industrial productivity.
The medium-term monetary policy statement issued by the RBZ recently indicates that the bank’s overnight accommodation rate 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 the money supply and curb speculative activities.
The document says that a cap on the interest rates at which banks can on-lend the proceeds of the medium-term lending facility would also be kept at 10% above the lending rate.
Presenting financial performance for the six-month period ended June 30, 2021, StanChart Managing Director Ralph Watungwa welcomed the move, agreeing with the central bank that it will go a long way in boosting economic growth.
“We welcome the decision to maintain the current monetary and fiscal policies which will promote economic stability at least until the end of the year. Notably, the 2021 medium-term monetary policy statement maintained interest rates for overnight housing and medium-term loans for productive sectors in order to control the money supply.
“The ceiling on interest rates at which banks can lend drawings has been kept at 10% above the borrowing rate to stimulate the recovery of productive sectors of the economy,” he said.
This development comes at a time when capacity utilization in the manufacturing sector is expected to reach 61% by the end of 2021, up from 47% last year.
Meanwhile, during the period under review, StanChart made an after-tax profit of $ 632 million, compared to $ 682.4 million in a comparative period last year.
“The quality of the loan portfolio has remained strong despite the disruptions caused by the Covid19 pandemic. The NPL ratio was significant at 0.002%, up from 0.005% as at December 31, 2020, ”said Lovemore Manatsa, Chairman of the Board of StanChart.
He added that the balance sheet remains strong, very liquid and well capitalized against minimum regulatory requirements.