Bank of Mozambique keeps benchmark interest rate unchanged

16 May 2014

The bank of Mozambique has decided to keep its benchmark interest rates unchanged, with the permanent liquidity facility unchanged at 8.25 percent, the central bank said.

In the statement on the main decisions of the Monetary Policy Commission, the central bank said that the permanent deposit facility rate remained unchanged at 1.50 percent and the required reserve ratio remained at 8.0 percent.

The Commission also decided to intervene in the interbank market to ensure that the May 2014 target for cash in circulation, of 47.553 billion meticals, was met.

According to the statement inflation in the first four months of the year remained affected by the floods that occurred in the country at the beginning of the year affecting transport of agricultural products, particularly fruit and vegetables, as well as coal and firewood along with a general rise in prices in the South African economy in the period.

The slight downturn seen in April is a reflection of the seasonal affect of the start of the cool season, which is the main season for fresh produce in Mozambique, although the metical has been stable against the US dollar and the rand, after some pressure seen in the foreign exchange market at the beginning of the year. (macauhub/MZ)