HARARE, The Reserve Bank of Zimbabwe (RBZ) has directed banks to slash interest rates to 12 per cent from 15 per cent per annum effective April 1 this year to make funding affordable for productive sectors of the economy.

The directive is among the 12-pronged measures the central bank announced here Wednesday in its 2017 first-half Monetary Policy Statement which is primarily focusing on boosting production and productivity in the economy as well as enhancing stability of the shaky financial sector.

The MPS is themed "Stimulating economic growth and bolstering confidence."

"Affordable credit is very important to enhance output and productivity," said RBZ Governor, Dr John Mangudya. "Therefore, for the national economy to flourish, affordable credit must be provided to both large and small scale businesses and individuals to enable them to invest in productive activities that increase jobs, exports and reduce poverty."

The central bank also said bank charges, inclusive of application fees, facility and administration fees must not exceed three per cent of loan amount.

In order to promote the growing use of plastic money in the economy in light of cash shortages, the RBZ said bank charges had been set at a maximum of 10 cents for transactions of at least 10 US dollars and less.

Other measures announced include in the monetary policy said the extension of the 200 million USD African Export-Import Bank (Afreximbank) Trade Debt-Backed Securities (Aftrades) facility which operates on the lines of the lender of last resort at the Bank for local banks.

The RBZ also put in place a 70 million USD nostro stabilisation facility aimed at addressing delays in foreign payments processing as well as measures to "promote efficiency and discipline in the utilisation" of forex to curtail abuse.

The delays, a result of foreign currency shortages have negatively impacted on industry productivity through delays in access to raw materials and other supplies. "Spending more foreign exchange on DSTV (Digital Satelite Television) subscriptions than on raw materials to produce cooking oil, for example, is not only counterproductive but also illogical," Dr Mangudya said.

In the six months between July and December last year, Zimbabweans spent 206 million USD in DSTV other card payments alone.

Such measures include restrictions on local use of Visa and Mastercard's which exert pressure on banks nostro balances. Nostro accounts are accounts belonging to local banks held by international financial institutions outside the country to facilitate international payments.

Dr Mangudya also announced an additional 20 million USD to be made available in support of gold mining, the country's top mineral in terms of forex earnings. This is on top of the 20 million USD facility to support small scale gold producers availed last year.