ZIMBABWE’S short-term money market rates spiked higher on Wednesday in their first large reaction to the central bank’s weekend rates hike. However, localised student unrest at the university campus on Wednesday had no effect on trade, dealers said. The Reserve Bank lifted its benchmark bank rate on Saturday by 2,5 percentage points to 45% and, dealers said, there was pressure for rates to go even higher. Tuesday saw an only modest upward movement in market rates. The Reserve Bank of Zimbabwe, which has resisted adjusting its lending rate to financial institutions, was forced to act after a chorus of complaints that investors were earning negative returns on the money market.
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