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Mozambique: Central bank maintains interest rate due to ‘military instability’
10:12 CAT | 13 Dec 2019
File photo: O País
The Monetary Policy Committee (CPMO) of the Banco de Moçambique decided on Thursday to keep the monetary policy interest rate (MIMO rate) at 12.75%, due to inflationary risks, such as worsening military instability.
“The decision to maintain the MIMO rate continues to be sustained by the prevalence of high risks and uncertainties that, if they materialise, could reverse the current profile of low inflation,” the statement said.
“Internally, we highlight the worsening of military instability in the North and Centre of the country and the greater likelihood of occurrence of climate shocks.”
“At the external level, commercial and geopolitical tension persists with negative implications on the volume of global trade and the dynamics of commodity prices,” it added.
The CPMO maintained the rates of the Permanent Deposit Facility (DFS) and the Permanent Assignment Facility (CSF) at 9.75% and 15.75%, respectively.
Similarly, the Mandatory Reserve (RO) coefficients were maintained for liabilities in local currency (13%) and in foreign currency (36%).
Average inflation at 12 months in Mozambique fell in November to 2.78%, according to data from the National Statistics Institute (INE) released on Thursday.
This year, since January, the indicator reached 4.08% in April and has been falling since then.
Accumulated inflation through late November was 2.20%.
The CPMO will continue to monitor the economic-financial indicators and risk factors and will take corrective measures if necessary, before the next ordinary meeting scheduled for 27 February 2020.
Source: Lusa
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