Bank of Mozambique raises interest rates

22 April 2016

The Bank of Mozambique raises interest rates once again on Wednesday, as a measure to control inflation, according to Mozambican state news agency AIM.

In a statement the Bank of Mozambique announced that the interest rate on the liquidity facility (interest rate paid by commercial banks to the central bank for the money borrowed on the interbank money market) increased 200 basis points to 12.75 percent.

This rate has gradually fallen since the end of 2012 and reached to 7.5 percent in November 2014, and remained at that level for a year, but rose again four consecutive times in the months of October, November and December 2015 and in February 2016, and now stands at 10.75 percent.

The rate remained unchanged in March but in April resumed its upward trend.

The Monetary Policy Committee noted that monetary policy continues to be characterised by pronounced risks of inflationary pressure, reflecting the effects of the depreciation of the national currency, the metical, the drought in south and central Mozambique, as well as excessive rainfall in the north and politico-military tension affecting the free movement of people and goods in some of the country’s major highways.” (macauhub/MZ)