Mozambique: Credit to the economy registers slight decline in April

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Mozambique: Credit to the economy registers slight decline in April

2:35 CAT | 24 Jun 2025

File photo: Banco de Moçambique

Credit in the Mozambican economy fell slightly in April, to 284,535 million meticais (€3,868 million), official data indicate.

According to Bank of Mozambique statistics, this is the second lowest monthly value in almost a year, slightly above the record low of last February (284,045 million meticais/€3,861 million).

The volume of credit granted by Mozambican banks also remains far from the historic peak of 290,973 million meticais (€3,955 million) registered in November 2024.

According to data from the central bank, credit to individuals continued to lead borrowing in April, rising to a record 100,774 million meticais (€1,370 million).

This was followed by the transport and communications sector, whose total credit granted by banks grew in April to 25,025 million meticais (€340.2 million); the manufacturing industry, with 22,094 million meticais (€300.3 million); and commerce, with 21,013 million meticais (€285.6 million).

The Bank of Mozambique’s Monetary Policy Committee (CPMO) decided on May 30 to further reduce the MIMO monetary policy interest rate to 11%, announced the governor of the central bank, Rogério Zandamela.

“This measure is essentially a result of the consolidation of the inflation outlook in single digits in the medium term, partly reflecting the favourable trend in international prices of goods and services, despite the maintenance of high risks and uncertainties associated with projections at the domestic level,” Zandamela said at the end of the CPMO meeting.

Questioned by journalists about the outlook for the rate’s evolution by the end of the year, and the possibility of it reaching single digits this year, Zandamela said that this new cut “is within the strategy” defined by the central bank: “The only thing we can say at this moment is that we are in line with the defined trajectory, 24 to 36 months. It may happen sooner, it may not happen. If it happens, it is good news.”

The reference interest rate has been fixed at 17.25% since September 2022, following the intervention of the central bank, which then began consecutive cuts from January 31, 2024, when it was reduced to 16.5%.

On March 27 last year, it was cut to 15.75%, on May 27 to 15%, on July 31 to 14.25%, on September 30 to 13.5%, on November 27 to 12.75%, on January 27 this year to 12.25% and on March 26 to 11.75%, with a new cut now to follow.

“The CPMO will continue with the process of normalizing the minimum rate in the medium term. The pace and magnitude will continue to depend on the inflation outlook, as well as the assessment of risks and uncertainties underlying the medium-term projections,” said Zandamela.

The next CPMO meeting is scheduled for July 30.

Source: Lusa