Mozambique: Most banks have high levels of non-performing loans
Mozambique: Credit to the economy hits new high in November 2024
1:07 CAT | 20 Jan 2025
File photo: Lusa
According to central bank figures, credit to the Mozambican economy grew again in November, to 290,973 million meticais (€4,422 million), a new record.
A statistical report by the central bank shows growth of 0.5% compared to October, surpassing the peak of almost 289,478 million meticais (€4,399 million) in September.
Credit to individuals continues to lead, accelerating again in November to 98,234 million meticais (€1,492 million euros), after consecutive monthly highs.
Next comes the transport and communications sector, where total credit granted by banks fell slightly again, to 24.827 billion meticais (€377 million); trade, with almost 24.623 billion meticais (€374.2 million); and the manufacturing industry, which fell to 24.220 billion meticais (€368 million).
The reference interest rate for credit in Mozambique fell by a further 0.7 percentage points in January, to 19%, its fourth consecutive monthly fall, the Mozambican Banking Association (AMB) had announced at the beginning of the month.
The rate, known as the prime rate, reached a peak of 24.1% in July 2023, a value that remained unchanged for six consecutive months, having started to fall from March 2024.
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.
The Monetary Policy Committee (CPMO) of the Bank of Mozambique announced at the end of November a further reduction in the MIMO rate from 13.5%, in force since the end of September, to 12.75%.
“This decision is supported by the continued consolidation of the single-digit inflation outlook in the medium term, despite the uncertainties regarding the duration of the post-election tension and its impact on the prices of goods and services,” read a statement from the Bank of Mozambique released after the bi-monthly CPMO meeting.
The key interest rate has been fixed at 17.25% since September 2022, following the intervention of the central bank, which then began consecutive cuts from 31 January 2024
The next meeting of the central bank’s Monetary Policy Committee is scheduled for 27 January.
Source: Lusa
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