Mozambique: Commercial banks keep key interest rate unchanged at 18% in June

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Mozambique: Commercial banks keep key interest rate unchanged at 18% in June

2:03 CAT | 30 May 2025

File photo: Lusa

The benchmark interest rate for credit in Mozambique will remain unchanged at 18% in June, according to information from the Mozambican Banking Association (AMB).

The rate is being maintained after a 50 percentage point cut in May, with the AMB having already cut another 50 percentage points in March, when it dropped to 18.5%, the fifth cut in six months. The rate remained unchanged at 19% in February, as it did later in April and now in June.

Since January 2024, 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, which influences the formula for calculating the prime rate) set by the central bank to control inflation.

On March 26, 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 inflation outlook in the single digits in the medium term, despite the increase in uncertainty regarding the effects of the worsening fiscal risk,” states the final statement of the CPMO meeting, which takes place every two months.

The stock of credit to the Mozambican economy grew by 0.3% in March, to 284.964 billion meticais (€3.994 billion), after the largest monthly drop in a year in February, according to official data reported this month by Lusa.

According to a statistical report from the Bank of Mozambique, this performance compares with the 284,045 million meticais (€3,981 million) in February, representing a decline of almost 1%.

However, the volume of credit granted by Mozambican banks remains far from the historical peak of 290,973 million meticais (€4,079 million) in November, 2024.

According to data from the central bank, credit to individuals continued to lead in March, rising to almost 99,386 million meticais (€1,363 million).

This was followed by the transport and communications sector, whose total credit granted by banks grew in March to 24,940 million meticais (€350 million), the manufacturing industry, with 22,314 million meticais (€312.8 million), and commerce, with 21,925 million meticais (€307.5 million).

Source: Lusa