The maintenance of the rate follows a 50-basis point cut in May, with the central bank having already reduced another 50 basis points in March, bringing it down to 18.5%. This marked the fifth cut in six months, with the rate only remaining unchanged at 19% in February, April, and now in June.
Since January 2024, the rate, known as the ‘prime rate’, has been gradually decreasing after six consecutive months at a peak of 24.1%.
The fluctuations in the ‘prime rate’ are linked to the monetary policy interest rate (MIMO rate, which influences the prime rate calculation) set by the central bank to control inflation.
The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided on March 26 to reduce the MIMO monetary policy interest rate from 12.25%, in effect since January, to 11.75%.
“This measure essentially results from maintaining the inflation outlook in single digits in the medium term, despite increased uncertainties regarding the effects of worsening fiscal risk,” declared the final statement from the CPMO meeting, which occurs every two months.
The stock of credit to the Mozambican economy increased by 0.3% in March, reaching 284.964 million meticais (3.994 million euros), following the largest monthly decline in a year in February, according to official data reported this month.
According to a statistical report from the Bank of Mozambique, this performance compares to 284.045 million meticais (3.981 million euros) in February, representing a nearly 1% decrease at that time.
However, the volume of credit granted by Mozambican banks remains far from the historical peak of 290.973 million meticais (4.079 million euros) in November 2024.
Central bank data indicates that credit to individuals continued to lead in March, rising to nearly 99.386 million meticais (1.363 million euros).
Following this was the transport and communications sector, with total bank credit increasing in March to 24.940 million meticais (350 million euros); the manufacturing industry at 22.314 million meticais (312.8 million euros); and commerce at 21.925 million meticais (307.5 million euros).
