Bank of Mozambique raises interest rates to absorb liquidity

15 October 2015

The Bank of Mozambique has raised its key interest rates by adding 25 basis points to the marginal lending facility taking it to 7.75 percent, the central bank said in a statement distributed Wednesday.

The statement, which announces the main decisions of the Monetary Policy Committee, also said that the interest rate on the deposit facility was increased by 50 basis points to 2.0 percent and the reserve requirements rate was increased by one percentage point to 9.0 percent.

The same committee decided to continue to intervene in the interbank market to limit cash in circulation in October to 62.925 billion meticais.

Provisional data cited in the statement showed that at the end of September foreign reserves fell by US$264.4 million to US$2.3079 billion, which represented 3.42 months of imports of goods and services, excluding major projects.

In the retail market the average nominal 12-month interest rate charged by credit institutions stood at 18.85 percent in August, which is a cumulative and annual reduction of 190 and 131 basis points, respectively. (macauhub/MZ)