Mozambique holds benchmark prime rate at 15.9% for third consecutive month

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Mozambique holds benchmark prime rate at 15.9% for third consecutive month

2:43 CAT | 30 Oct 2020

File photo: Voa Portugues

Mozambique’s benchmark interest rate will remain at 15.9% for the third consecutive month in October, the association of banks and the central bank has announced.

Since April, when it reached 18.4%, the rate has fallen 250 basis points to 15.9%, a figure fixed on August 1.

Compared to the beginning of the year, the prime rate has decreased by 210 basis points, an equal reduction when compared to the same month in 2019.

The creation of the prime rate, with an initial value of 27.75%, was agreed between the central bank and the Mozambican Banking Association (AMB) in June, 2017, with the aim of eliminating the proliferation of interest rates in the country.

The objective was that all credit operations in Mozambique would be based on a single rate, “plus a margin (spread), to be added or subtracted as a result of risk analysis”, the promoters explained.

Source: Lusa