“This measure stems mainly from the consolidation of inflation expectations into single digits in the medium term, partly reflecting the favorable trend in international goods and services prices, despite continued high risks and uncertainties domestically associated with projections,” the governor said at a press conference in Maputo, following the CPMO meeting.
When asked by journalists about the prospect of the rate’s evolution by the year’s end and reaching single digits this year, Zandamela stated this new cut “is within the strategy” defined by the central bank: “The only thing we can say at the moment is that we are in line with the defined trajectory, 24 to 36 months, it may happen sooner, it may not. If it does, it is good news.”
The benchmark interest rate was set at 17.25% since September 2022, after the central bank intervened and then initiated consecutive cuts starting January 31, 2024, reducing it to 16.5%.
On March 27 of last year, it was cut to 15.75%, on May 27 to 15%, on July 31 to 14.25%, on September 30 to 13.5%, on November 27 to 12.75%, on January 27 this year to 12.25%, and on March 26 to 11.75%, followed by the latest cut.
“The CPMO will continue with the normalization process of the minimum rate in the medium term. The pace and magnitude will continue to depend on inflation expectations, as well as risk assessments and uncertainties underlying medium-term projections,” Zandamela said today.
The next CPMO meeting is scheduled for July 30.
He added that this CPMO session was preceded by the meeting of the Financial Stability and Inclusion Committee of the Bank of Mozambique, “which assessed systemic risk and major vulnerabilities,” concluding “that the national financial system remains stable, resilient, and generally healthy.”
The central bank governor also stated that after the assessment made at this meeting, inflation forecasts “remain in single digits in the medium term” and the “banking sector remains solid, capitalized, and resilient.”
