Mozambique: Central bank holds benchmark prime rate at 18%

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Mozambique: Central bank holds benchmark prime rate at 18%

10:51 CAT | 03 Mar 2020

File photo: Lusa

The benchmark interest rate of Mozambique’s financial system (prime rate) is to remain unchanged in March, for the fifth month in a row, at 18%, the Mozambican Association of Banks and the country’s central bank said on Monday in a statement.

Since it was created in May 2017, the benchmark rate has never risen and has already fallen 9.75 percentage points.

The last decline took place in October when it fell from 18.3% to 18%.

The creation of the prime rate was agreed between the Bank of Mozambique and the Mozambican Association of Banks to eliminate the proliferation of benchmark rates for the cost of money and came into effect on 1 June 2017.

The goal was for the interest rates used in all credit operations to be based on a single rate, plus a margin (spread), to be added to or subtracted from the prime rate through risk analysis of each contract, the developers said.

Source: Lusa