Retail banks in Mozambique slow to reduce interest rates

23 June 2014

Adjustments to interest rates by retail banks in Mozambique have been slow and too small in relation to the signs given by the central bank, the governor of the Bank of Mozambique said in Maputo cited by daily newspaper Notícias.

Over the last few months the Monetary Policy Committee of the Bank of Mozambique has intervened in the interbank market in order to meet its monetary base target as well as to keep interest rates on the permanent liquidity and deposit facilities low.

Noting that there were a number of factors that could affect the transmission of those signs, Ernesto Gove said that the measures adopted by the Bank of Mozambique had not been followed by a significant drop in interest rates on loans charged by retail banks.

During the VI Scientific Days of the central bank, Gove said that as well as a lack of changes to interest rate it was also important to assess other factors such as exchange rates, loan rates, price of assets and even the expectations of economic agents.

The Scientific Days of the Bank of Mozambique are considered to be an important forum for researchers from a variety of academic and professional backgrounds to publish the results of their research, providing opportunities for debate and exchange of information. (macauhub/MZ)