The Bank of Mozambique decided on August 12th to cut the benchmark interest rate for the second time this year to 8.75 percent, aiming to improve the retail sector and noting that the global economic outlook and the increased volatility in prices of major commodities may affect the Mozambican economy.
In the Monetary Policy Statement, the Bank of Mozambique noted that in July, the Consumer Price Index from the city of Maputo, reported the third negative monthly variation in a row (-0.34%), as prices of foodstuff decreased.
The Bank also noted that the slowdown in general price level results from the stability of the Metical in the domestic foreign exchange market and the recovery of domestic production of fruits and vegetables, together with seasonal effects.
The economic climate indicator dropped in June, after increasing in the previous three months, due to lower demand and employment expectations.
Preliminary data shows that in June, private sector indebtedness expanded by 1.35 billion MZN, reaching 130.7 billion MZN, and recording an annual increase of 27 percent, the Bank of Mozambique said.
The Bank of Mozambique decided to intervene in the interbank markets in order to ensure that the stock of base money does not surpass 43817 million Meticais, at the end of August of 2013. It also decided to cut the Standing Lending Facility interest rate by 25 bps to 8.75 percent; reduce the Standing Deposit Facility interest rate by 25 bps to 1.5 percent, and maintain the Reserve Requirements Ratio unchanged at 8.0 percent.
8/16/2013 6:31:17 PM