“This modest reduction reflects the worsening risks and uncertainties associated with inflation projections, notably the delay in domestic public debt instrument payments by the State. Inflation prospects remain in single digits in the medium term. In October 2025, the annual inflation stood at 4.8% after 4.9% in September,” announced the central bank governor, Rogério Zandamela, speaking to journalists in Maputo after the Monetary Policy Committee (MPC) meeting.
The benchmark interest rate in Mozambique was set at 17.25% since September 2022, following central bank intervention, which then initiated consecutive cuts starting from January 31, 2024, when it was reduced to 16.5%. In March of the previous year, the Bank of Mozambique cut it to 15.75%, with subsequent reductions at every following meeting, reaching 9.75% in September and now down to 9.5%.
In his address, Zandamela warned that the “domestic public debt continues to worsen,” impacting the normal functioning of the financial market.
“Domestic public debt, including mutual and lease agreements, and overdue liabilities stand at 465.8 billion meticais [6.259 billion euros], representing an increase of 50.3 billion compared to [675 million euros] December 2024. The delay in the State’s payment of domestic public debt instruments is leading to reduced appetite for public securities and market interbank interest rate rigidity,” Zandamela pointed out.
Thus, he stated, “risks and uncertainties associated with inflation projections remain high”: “In the medium term, in addition to the risks and uncertainties linked to the effects of climate shocks and the sluggish recovery of productive capacity and the supply of goods and services in the economy, the delay in the State’s payment of domestic public debt instruments stands out. In this context, the MPC reaffirms its commitment to pursuing a prudent monetary policy geared towards macroeconomic stability.”
The same official added that, therefore, “given the worsening of risks and uncertainties,” the stance of monetary policy will be “henceforth conditioned to the assessment of risks and uncertainties underlying inflation projections.”
The MPC meets every two months, with the next meeting scheduled for January 28, 2026.
