Mozambique: Banks cut benchmark interest rate to 18% in May

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Mozambique: Banks cut benchmark interest rate to 18% in May

12:17 CAT | 02 May 2025

File photo: Banco de Moçambique

The benchmark interest rate for credit in Mozambique will fall by 50 percentage points to 18% in May, according to information from the Mozambican Banking Association (AMB) to which Lusa had access today.

The AMB had already cut the rate by 50 percentage points in March to 18.5%, the fifth cut in six months. Only in February and April had the rate remained unchanged, at 19%.

Since January 2024, the rate, known as the ‘prime rate’, has been progressively falling, after six consecutive months at highs of 24.1%.

The fluctuations in the prime rate are associated with the monetary policy interest rate (MIMO rate) set by the central bank to control inflation.

On 26 March, the Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to further reduce the MIMO monetary policy interest rate from 12.25%, in force since January, to 11.75%.

“This measure is essentially a result of maintaining the single-digit inflation outlook in the medium term, despite the increased uncertainty regarding the effects of the worsening fiscal risk,” stated the final statement of the bi-monthly CPMO meeting.

The next CPMO meeting is scheduled for 28 May.

Source: Lusa