Bank of Mozambique reduces base interest rate to 9.0 pct

11 June 2013

The Bank of Mozambique has reduced the interest rate on its permanent loan liquidity facility by 50 basis points to 9.0 percent and the required reserve rate by 50 basis points to 1.75 percent, the Mozambican central bank said Monday.

The bank also announced that the reserve requirement ratio had been kept at 8 percent and that it would intervene in interbank markets to ensure that cash in circulation does not exceed 40.787 billion meticals at the end of June of this year.

Throughout 2012 the Bank of Mozambique cut its permanent loan liquidity facility rate by 550 basis points or 5.5 percentage points with a view to stimulating the country’s economy.

The statement issued by the bank said that prices had risen in May and that inflation had risen from 2.64 percent in April to 2.85 percent in May, reflecting a recovery in fruit and vegetable production on the domestic market, which was severely affected by flooding at the beginning of the year. (macauhub)