Bank of Mozambique reduces permanent liquidity facility rate to 13.75 pct

13 March 2012

The Bank of Mozambique said Monday it had reduced the interest rate on its permanent liquidity facility by 125 basis points to 13.75 percent, and the permanent deposit facility by 150 basis points to 3.5 percent, the central bank said in a statement issued in Maputo.

The bank also announced that drop of the two main interest rates would have immediate effect.

The reduction of the interest rate on the permanent liquidity facility is the second one announced by the central bank in the last four months and is intended to boost the country’s economic growth at a time when the rate of inflation has fallen to its lowest level in two years.

The Monetary Policy Commission of the Bank of Mozambique also decided to keep the Required Reserve Rate unchanged at 8.5 percent and intervene in the interbank markets in order to ensure that the balance of the monetary base does not exceed 33.381 billion meticals at the end of March 2012. (macauhub)