Mozambique: Credit to the economy fell to €3,918 million in February

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Mozambique: Credit to the economy fell to €3,918 million in February

1:05 CAT | 22 Apr 2025

File photo: Lusa

The stock of credit to the Mozambican economy fell slightly in February, to 284,045 million meticais (€3,918 million), the largest monthly drop in a year, according to official data consulted by Lusa on Saturday.

According to data from a statistical report by the Bank of Mozambique, this performance compares with the 286,511 million meticais (€3,704 million) in January, a decline of almost 1%, after practically consecutive months of increase.

In April 2024, the credit stock had also fallen, by 1%, to 270,676 million meticais (€3,734 million).

The volume of credit granted by Mozambican banks thus continues to move away from the historical peak of 290,973 (€4,005 million) in November 2024.

According to data from the central bank, credit to individuals continued to lead in February of this year, rising to almost 98,837 million meticais (€1,363 million euros).

This was followed by the transport and communications sector, whose total credit granted by banks fell again slightly in February, to 22,634 million meticais (€312.5 million), the manufacturing industry, with 22,230 million meticais (€307 million), and commerce, with 21,846 million meticais (€301.7 million).

The reference interest rate for credit in Mozambique will remain unchanged in April, at 18.5%, with the banking system not following the recent reduction decided by the central bank, the Mozambican Banking Association (AMB) announced this week.

In March, the AMB had already cut this rate by 50 percentage points, which fell to 18.5%, the fifth cut in six months, as only in February the rate had remained unchanged at 19%, as will happen now in April.

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, which influences the formula for calculating the ‘prime rate’) set by the central bank, in order to control inflation.

The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided on 26 March 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,” reads the final statement of the bi-monthly CPMO meeting.

Source: Lusa