Mozambique Central Bank Keeps Benchmark Rate at 10.75% in March

MAPUTO, Mozambique, Capital Markets in Africa — The Bank of Mozambique has decided to increase key interest rates, and the marginal lending facility was kept at 10.75 percent as well as the deposit facility (the rate the central bank pay to the commercial bank deposit money) remained unchanged at 4.25 percent, the central bank said in a statement released after the Bank’s Monetary Policy Committee on Monday.

A statement from the Bank’s Monetary Policy Committee, stated that “in light of the projections for inflation in the short and medium term, which continue to reflect the prevalence of factors of pressure, the Committee thinks it important to strengthen the coordination of fiscal-monetary and sector policies, as well as the monitoring of the main macro-economic indicators”.

Regarding inflation, figure from the National Statistics Institute (INE), based on the consumer prices indices for the three largest cities (Maputo, Nampula and Beira), show an inflation rate for February of 2.24 per cent.

The Mozambican currency, the metical, continued to depreciate in February, though at a fairly modest pace. At the end of February, the US dollar was quoted at 47.28 meticais on the Interbank Exchange Market. The metical had slid by 2.65 per cent against the dollar during the month, and the annual depreciation was 49.06 per cent.

The Central  Bank hinted that a provisional figures show that in February the country’s net foreign reserves fell by 31.8 million dollars to 1.83 billion dollars. The reserves are enough to cover three months of imports of goods and non-factor services, when the operations of the foreign exchange mega-projects are excluded.

The Monetary Policy Committee also decided that the central bank will intervene in the inter-bank markets to ensure that, by the end of March, the monetary base does not exceed 66.443 billion meticais.