Bank of Mozambique reduces base interest rate to 10.5 percent

17 September 2012

The Bank of Mozambique has reduced the interest rate on its permanent loan liquidity facility by 1 percentage point to 10.5 percent and the required reserve rate by 50 basis points to 2.5 percent, the Mozambican central bank said in a statement issued in Maputo.

The latest meeting of Monetary Policy Commission also decided to keep the Required Reserve Rate unchanged at 8 percent and to intervene in the interbank markets in order to increase the amount of cash in circulation by 2 billion meticals to 37.406 billion meticals.

These measures, the Bank of Mozambique said, took into account the prevailing risks in the international economic and financial climate, particularly those related to the sovereign debt crisis in Euro Zone countries and a risk of contagion.

Noting that the commission had found Mozambique’s main economic and financial indicators to be satisfactory and developing in line with the programme set out for this year, the central bank also said that conditions were in place to maintain a monetary policy that would lead to economic expansion.

The Bank of Mozambique started reducing its benchmark rates in January 2011 and, thus far, has reduced them on seven occasions. This year alone the rates were reduced in March, April, June, July, and September. (macauhub)