Bank of Mozambique Cuts the Benchmark Interest Rate to 9%


The Bank of Mozambique decided to cut the benchmark interest rate by 50 bps to 9.0 percent on June 10th, citing an improvement in the outlook for short-term inflation rate.

In the Monetary Policy Statement, the Bank of Mozambique noted that in May, the Consumer Price Index (CPI) from the city of Maputo, reported first time this year a negative monthly variation (0.41%), after an increase of 0.60% in the previous month. While prices of foodstuff and non-alcoholic beverages declined by 0.6 percentage points, prices for the housing, water electricity, gas and other fuels increased by 0.2 percentage points. Also, the decline in prices of several commodities, increasing stability of the Metical against the US dollar and the strength of the Metical against the South African Rand contributed to a drop in monthly inflation.

The Bank also noted that following a decline in March, the economic climate indicator slightly improved in April as a recovery in the employment outlook offset lower consumption expectations. While confidence improved in restaurants, hotels and nonfinancial services; it declined in transportation, construction and retail.

The Bank of Mozambique decided to intervene in the interbank markets in order to ensure that the stock of base money does not surpass 40787 million Meticais, at the end of June 2013. It also decided to cut the Standing Lending Facility interest rate by 50 bps to 9.0 percent; reduce the Standing Deposit Facility interest rate by 50 bps to 1.75 percent, and maintain the Reserve Requirements Ratio unchanged at 8.0 percent.

Bank of Mozambique Cuts the Benchmark Interest Rate to 9%


Joana Taborda | joana.taborda@tradingeconomics.com
6/10/2013 7:27:13 PM