Mozambique: Credit to economy falls 2% in June

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Mozambique: Credit to economy falls 2% in June

3:30 CAT | 15 Sep 2025

File photo: Lusa

The stock of credit to the Mozambican economy fell almost 2% in June, compared to the previous month’s record, to 287,975 million meticais (€3,834 million), according to official data from the Bank of Mozambique.

This figure contrasts with the peak of 292,682 million meticais (€3,898 million) in May and 284,535 million meticais (€3,789 million) in April, the second lowest figure in a year.

According to the data, credit to individuals continued to lead in June, rising to 100,321 million meticais (€1,335 million).

This was followed by the transportation and communications sector, whose total lending from banks grew in June to over 26,738 million meticais (€356 million); commerce, with over 21,735 million meticais (€289 million); and the manufacturing industry, with 21,001 million meticais (€279 million).

The benchmark interest rate for credit in Mozambique fell 0.7 percentage points in September, to 16.5%, according to the Mozambican Banking Association (AMB).

Since January 2024, the prime rate has been progressively decreasing, after six consecutive months at highs of 24.1%.

Fluctuations in the prime rate are linked to the central bank’s monetary policy interest rate (MIMO rate, which influences the prime rate calculation formula) to control inflation.

The cut follows a further reduction in August, to 17.20%.

The Monetary Policy Committee (CPMO) of the Bank of Mozambique cut the MIMO monetary policy interest rate for the ninth consecutive time on July 31st, by 0.75 percentage points, to 10.25%.

“This measure is essentially a result of the continued consolidation of single-digit inflation prospects in the medium term, reflecting, in part, the favourable trend in international commodity prices, despite the continued domestic risks and uncertainties associated with projections,” central bank governor Rogério Zandamela told a press conference in Maputo at the end of the CPMO meeting, which takes place every two months.

Zandamela added that, in the medium term, “a gradual recovery of economic activity is expected” in Mozambique, excluding liquefied natural gas production, “partly favoured by the reduction in interest rates and the prospects for implementing projects in strategic areas”.

According to Zandamela, “the risks and uncertainties associated with inflation projections remain high”, and the following stand out as “likely factors for the increase in inflation in the medium term: the impacts of the worsening situation on the State Budget, uncertainties regarding the speed of restoring productive capacity and the supply of goods and services, and the effects of climate shocks”.

“The CPMO will continue the process of normalizing the MIMO rate in the medium term. The pace and magnitude will continue to depend on the inflation outlook, as well as the assessment of the risks and uncertainties underlying the medium-term projections,” he added.

Source: Lusa