29 SepThe RBZ cut its rate to 27.5%. Your loan probably won’t get cheaper.

The Reserve Bank of Zimbabwe (RBZ) has cut its main interest rate again, to 27.5% from 30%. In June it stood at 35%. This rate is called the policy rate, and you can think of it as the RBZ’s price for money. Banks take their cue from it when they decide what to charge you for a loan, so when it falls, ZiG loans are supposed to get cheaper.

Will yours? Probably not. Most loans in Zimbabwe are in US dollars, and this rate barely touches them. Banks also have to lock away 30% of the money in current accounts (the RBZ calls this the statutory reserve), which caps what they can lend. And 27.5% is still steep when prices are barely rising.

What the policy rate does

Think of a pot on the fire. When it starts to boil over, you pull out some firewood. The policy rate works like that firewood. When the RBZ raises it, borrowing gets dearer, so people and businesses borrow and spend less, and prices stop climbing so fast. When it lowers the rate, it is adding wood back: borrowing gets cheaper and spending picks up.

In the ZWL years the rate went far higher than that, and for a different reason. With prices racing ahead, you could borrow local money, buy US dollars, and repay the loan with money that had lost most of its value. A very high rate made that trick too costly to try.

That danger has faded. Annual inflation, meaning how fast prices rise over a year, was 4.4% in May, down from 95.8% in July 2025, and the ZiG has held between 25 and 27 to the US dollar this year. With the pot no longer boiling over, the RBZ can ease off the penalty, though only by a little. It says so itself: the cut is a realignment, and policy stays tight.

Most loans never feel it

The first reason is the currency. Roughly nine in every ten bank loans in Zimbabwe are in US dollars, going by the latest figures we could find, which run to the end of 2025. The policy rate mainly sets the price of ZiG loans, so the cut misses most borrowers before it even starts.

Go back to the pot on the fire, but picture a kitchen with two fires. The RBZ has added a little wood to one of them, but nearly everyone is cooking on the other. A factory buying machinery in dollars is standing at that second fire, and so is anyone else borrowing in dollars. One user on X put it bluntly: cutting ZiG rates is “purely academic as many prefer borrowing US$”.

The locked pantry

The second reason is that banks cannot lend everything they hold. Say you put US$100 in a current account. The bank must lock US$30 of it away at the RBZ, so it has only US$70 left to lend. This is the statutory reserve from the start of this article, and you can think of it as a pantry the bank cannot open, however hot the fire.

A lower policy rate makes lending cheaper, but it does not open that pantry. Banks were already holding back too: among the listed banks Equity Axis reviewed, they lent out less than half of the money deposited with them on average. A hotter fire does little good when so much of the food is locked away.

Still expensive

The third reason is the price itself. What matters to a borrower is the rate after inflation, sometimes called the real rate. Prices are now rising by only a few percent a year, so a 27.5% policy rate sits far above that. Even the 22.5% cap the RBZ has set on bank loans to productive sectors is steep, because a business has to grow by more than the interest just to break even.

Take a simple example. For every ZiG100 you borrow for a year at 22.5%, you owe about ZiG22.50 in interest before you have repaid any of the loan itself. That is a lot to earn back before you see a profit.

People have noticed. One user asked why ZiG loans are “still pegged @40%” if inflation is real, though that 40% is their claim and not an official figure. Another said a bank quoted them “7500 for 50 months” without saying how much they were borrowing, so we cannot work out the rate.

A question the RBZ hasn’t answered

There is also a bigger question about the fire itself. Analyst Tinashe Murapata, who posts as @baba_nyenyedzi, says the fire was never really turned down. In his view the earlier high rates cut lending but did not stop the total amount of ZiG in the economy growing, at about 60% a year. When there is more money around than goods to buy, prices tend to rise.

He also points out that the RBZ’s special cheaper loan scheme for priority sectors, the Targeted Finance Facility, now charges 12.5%, which he says is below what dollar loans cost. If he is right, cutting the price of ZiG credit sits awkwardly with an RBZ that, as we saw earlier, says policy stays tight. Those figures are his, and we have not checked them against RBZ data.

The case for the cut

None of this makes the cut meaningless. Anyone who does borrow in ZiG pays less, and government borrowing gets cheaper too. It also signals confidence, and the RBZ reports reserves above US$2 billion, roughly two months of imports.

One supporter on X argued it gives banks the green light to offer cheaper, more accessible credit. That may prove right. So far, though, nobody has shown a bank passing the cut on to a customer.

What to watch

Banks set their own loan rates, so the cut only matters if they pass it on. Watch whether they publish lower ZiG rates in the coming weeks, and whether the RBZ enforces the 22.5% cap on loans to productive sectors. If your bank changes its ZiG loan rate, we would like to hear about it.