London, Friday, 22 September 2023
In its meeting on September 22, 2023, the Central Bank of Mozambique decided to maintain the 17.25% key MIMO interest rate, which means that borrowing prices will remain at their highest point since March 2018. Although it was anticipated that inflation would stay in the single digits over the medium term, policymakers said that their decision was based on the growing risks and uncertainties related to inflation estimates.
The Bank reported that, mainly as a result of a slowdown in food costs and a steady Mexican currency rate, inflation had further decreased to 4.9% in August from 5.7% in July. In the meanwhile, continued pressure on public spending is anticipated, and questions about the course and effects of extreme weather occurrences remain. The size of the impact of the ongoing conflict between Russia and Ukraine, coupled with the recent higher trend in fuel costs, pose considerable uncertainty on a worldwide scale. In spite of this, the Bank kept its medium-term economic growth forecast moderate.