In the history of world economies, interest rates have perpetually occupied a central role in the formulation of effective monetary policy measures in both developed and developing countries. This largely stems from the critical role that interest rates play as the cost of capital in determining the deployment of surplus investable funds to key export and productive sectors of the economy (RBZ, 2014). In essence, the extent to which credit is extended to productive sectors is intricately bound to interest rate developments, which in turn determine the affordability of loans.

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