Bank of Mozambique increases interest rates to curb rising prices

17 November 2015

The benchmark interest rates for the Mozambique market were increased by 50 and 75 basis points and the reserve requirements increased by 150 basis points to 10.5 percent, according to the latest decision of the country’s central bank.

The Monetary Policy Committee, which met Monday, decided to increase the interest rate on the marginal lending facility by 50 basis points to 8.25 percent and the interest rate on the deposit facility by 75 basis points to 2.75 percent.

The meeting also decided to intervene in the interbank market to ensure that the money supply will not exceed 66.4375 billion meticais at the end of November.

The statement issued by the Bank of Mozambique said that the international economic climate, combined with the shock felt by the Mozambican economy has been reflected in moderate GDP growth and the deterioration of external sector indicators with an impact on the behaviour of the exchange rate and inflationary pressure.

“In a context where the short- and medium-term forecasts and medium-term show signs of a need to be doubly cautious, the Monetary Policy Committee decided (increases in key interest rates) in order to ensure macroeconomic stability in the country”, the document said. (macauhub/MZ)