Bank of Mozambique reduces MIMO Rate by 50 basis points to 12.75%

15 August 2019

The benchmark interest rate in Mozambique, known as the MIMO Rate, has been reduced by 50 basis points to 12.75%, according to a decision taken on Wednesday in Maputo by the Bank of Mozambique’s Monetary Policy Commission.

It also decided to reduce by 50 basis points the deposit and lending rates to 9.75% and 15.75% respectively and to keep the reserve requirement ratios for domestic and foreign currency liabilities at 14.00% and 36.00%, respectively.

The decision to reduce the MIMO Rate was justified by the continued improvement in the medium-term inflation outlook, “which consolidates the stability of this indicator at single digit levels.”

“Our assessment of the risks associated with this projection has become more favourable with the recent Peace Agreement and the consequent start of the disarmament, demobilisation and reintegration process, although uncertainties persist that justify the conservative stance of monetary policy,” said the statement.

The Monetary Policy Commission has stated that international reserves remain at comfortable levels, capable of covering about six months of imports, excluding major projects, having increased since June by around US$111 million to US$3.244 billion.

Government debt contracted through Treasury Bills, Bonds and advances from the Bank of Mozambique has increased to 134.478 billion meticais since June, reflecting the issuance of Treasury Bills in the amount of 3.787 billion meticais. (Macauhub)