The Central Bank kept Mozambique’s interest rate at 17.25%

The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided this Friday to maintain the monetary policy interest rate, known as MIMO, at 17.25%, the institution said in a statement.

“This decision is underpinned by increased risks and uncertainties surrounding the inflation outlook, despite prospects for inflation to remain in the single digits over the medium term,” the Bank of Mozambique said in a statement.

In August, the document said, annual inflation fell to 4.9% from 5.7% in July, a decline mainly due to falling food prices, which was facilitated by the extension of the cool season in conditions of stable weather conditions.

“Core inflation registered an increase, which mainly reflects rising prices in the food service sector and for clothing and footwear,” the report said.

The central bank acknowledged that the “risks and uncertainties” underlying inflation forecasts had worsened.

“At the domestic level, pressure on government spending and uncertainty about the development and impact of extreme weather events are expected to prevail. At the external level, there are uncertainties regarding the scale of the impact of the continuation and escalation of the conflict between Russia and Ukraine. , as well as the recent upward trend in fuel prices,” the central bank of Mozambique noted.

The regulator also indicated that the domestic public debt, excluding loan and lease agreements and outstanding obligations, amounts to 321.1 billion metises (4.717 million euros), representing an increase of 46 billion (675 million euros) compared to December 2022.

“The CPMO will continue to monitor evolving risks and uncertainties associated with the inflation outlook and will not hesitate to take necessary corrective actions,” concludes the CPMO, which will meet again on November 22.