The Bank of Mozambique’s statistical report reveals that the credit stock in January compared to 286.359 billion meticais (4.120 billion euros) recorded in December, marking a 3.5% increase from the total credit stock of 277.159 billion meticais (3.988 billion euros) by the end of 2023.
Despite January’s growth, credit extended by Mozambique’s banking sector remains lower than the historical peak of 290.973 billion meticais (4.187 billion euros) seen in November 2024.
The central bank’s data indicates that personal loans led the credit sector in January, increasing to 97.836 billion meticais (1.408 billion euros).
The transport and communications sector followed, with total bank credit declining slightly in January to 24.007 billion meticais (345.5 million euros), alongside the manufacturing industry at 23.369 billion meticais (336.2 million euros) and trade at 23.281 billion meticais (335 million euros).
The benchmark interest rate for credit in Mozambique is set to remain unchanged at 18.5% in April, with the banking system not reflecting the recent central bank’s rate reduction, as announced by the Mozambican Banking Association (AMB) this week.
The AMB had already reduced the rate by 50 basis points in March, lowering it to 18.5%. This was the fifth cut in six months, with the rate having remained at 19% in February, similar to its status for April.
Since January 2024, the prime rate has been gradually declining after consistently reaching highs of 24.1% for six months.
Fluctuations in the prime rate are linked to the central bank’s monetary policy rate (MIMO rate), which influences how the prime rate is calculated to manage inflation effectively.
On March 26, the Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to lower the MIMO policy interest rate from 12.25%, effective since January, to 11.75%.
“This measure is primarily in response to the sustained outlook for single-digit inflation in the medium term, despite growing uncertainties concerning the impact of increased fiscal risk,” stated the final communiqué from the CPMO meeting, which occurs bi-monthly.
