Interest rates in Mozambique should be reduced, central bank official says

3 August 2012

Interest rates in Mozambique have room to be reduced in order to ensure more funding for the private sector without affecting competitiveness and market stability, said Bank of Mozambique director, Valdemar de Sousa.

The central bank currently charges retail banks an interest rate of 11.5 percent on the permanent liquidity facility, and until last June retail banks provided loans at a one-year rate of 22.45 percent, and offered an interest rate on deposits of 13 percent.

Cited by daily newspaper Notícias the director and spokesman for the Bank of Mozambique said that although the bank had relaxed its monetary policy in the second quarter of this year, retail interest rates had not seen the drop that was expected.

The measures taken by the Monetary Policy Commission were intended to improve the country’s main economic and financial indicators, notably the short and medium term inflation trend and other macroeconomic indicators, including the prevailing risk factors of the domestic economy.

As well as this reduced interbank rates have been accompanied by a slowdown in other monetary interbank market rates, such as interest rates on treasury bonds with maturities of 91, 182 and 364 days. (macauhub)