Bank of Mozambique maintains benchmark rate at 27.75 percent

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Bank of Mozambique maintains benchmark rate at 27.75 percent

11:12 CAT | 03 Jul 2017

Voa (File photo) / Mozambique's Central Bank building in Maputo

The Bank of Mozambique set the reference rate in the national financial market for July at 27.75 percent, holding the index for the second consecutive month, according to information distributed to the press in Maputo.

The central bank also held the weighted average rate for international monetary market operations and the single index rate at 21.75 percent.

The creation of the single index (prime) rate was agreed between Bank of Mozambique and the Mozambican Association of Banks on May 17 as a measure to eliminate the proliferation of different interest rates in the country.

All credit operations are now based on the single rate, plus a spread according to the risk analysis of each contract.

“What we have just witnessed is an important step towards crystallising the reforms introduced more than 20 years ago when it comes to determining interest rates,” Rogério Zandamela, governor of the central bank, said when the measure was announced in May.

The creation of the single rate is in line with international practice, which imposes a uniform reference in the calculation of interest rates for credit operations.

Source: Lusa