* Aim is for central bank to once again influence interest
* Zimbabwe ditched its own currency in 2009 due to
* Money market rates chaotic since then
By MacDonald Dzirutwe
HARARE, March 22 The African Export-Import Bank
(Afrexim) on Saturday gave Zimbabwe a $100 million loan to allow
its central bank to set up an inter-bank market for the first
time in five years, which would allow the apex bank to influence
The southern African state abandoned its own money in 2009
after hyperinflation rendered it worthless, and adopted foreign
currencies such as the U.S. dollar and South Africa's rand which
left the central bank unable to influence rates.
Money market rates have spiralled out of control as a
result, with bank deposits attracting returns as low as 0.15
percent while borrowing costs are quoted as high as 35 percent -
a prohibitive rate for farmers and manufacturers.
The central bank will use the $100 million to re-introduce
an inter-bank market - where local banks can borrow from others
with surpluses - and set an overnight accommodation interest
rate, which would act as the benchmark for market rates.
Finance Minister Patrick Chinamasa said the fund was part of
measures to improve liquidity in an economy facing declining
export earnings and companies that are struggling to survive.
"This will at the very least unlock surplus funds from
surplus banks for those in deficit," Chinamasa told a press
Local banks would use Afrexim Bank-backed securities and
government treasury bills as collateral when borrowing from each
other. Treasury Bills will be issued from Monday, Chinamasa
The central bank published an interest rate range guide for
the money market in January and proposed indicative yields of
between 6.6 percent and 8 percent for short term debt.
The government has taken over the central bank's $1.35
billion debt and is seeking up to $200 million to capitalise the
Britain's Standard Chartered and Barclays Plc
and South Africa's Standard Bank and Nedbank
are the major foreign banks with operations in
(Editing by Raissa Kasolowsky)