Mozambique: Interest rate cuts increase credit – central bank governor

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Mozambique: Interest rate cuts increase credit – central bank governor

12:25 CAT | 06 Nov 2025

Photo: Notícias

The governor of the Bank of Mozambique, Rogério Zandamela, said on Wednesday that the normalisation of the key interest rate, which fell this year after historic highs in 2024, had allowed credit to the economy to increase.

“I would like to highlight that, throughout this year, our actions in terms of monetary policy have been to continue the cycle of normalisation of the monetary policy interest rate,” said Zandamela, speaking at the opening of the 50th consultative council of the Bank of Mozambique, taking place in the city of Pemba, Cabo Delgado.

The key interest rate in Mozambique had stood at 17.25% since September 2022, following central bank intervention, which then began consecutive cuts from 31 January 2024, when it was reduced to 16.5%. The governor recalled that since then, the monetary policy interest rate, known as the MIMO, “has been reduced, in accumulated terms, by 750 basis points”, to 9.75% in September 2025, the “lowest level since its introduction in 2017”.

“In line with this development, the Prime Rate, the commercial banks’ benchmark interest rate in their relationship with their customers, fell by 470 basis points to 16.50% in September this year, reflecting the financial system’s positive response to monetary policy decisions and the consequent gradual improvement in the economy’s financing conditions,” he pointed out.

“As a result, credit to the economy recorded an annual recovery of around 1% in September 2025, after zero growth of 0% in the same period last year,” added Zandamela.

The governor also admitted that the “macroeconomic framework for the year 2025 has been marked by continued price stability, in a context of gradual recovery in economic activity”. Still, he stressed that in foreign transactions there was “a 3.1% worsening in the current account deficit in the first half of the year”, in year-on-year terms, so the country remains “dependent on foreign savings to finance” the economy.

“Even so, considering data up to the end of October, our gross international reserves remain at comfortable levels, an important sign of resilience in the face of external shocks, and a real shield protecting national sovereignty,” he pointed out.

Zandamela added that the national banking sector “remains solid and well capitalised, with solvency and liquidity ratios well above regulatory limits, which confirms the robustness and stability of the national financial system”.

“Even in 2025, we continue to make significant progress in financial inclusion, resulting from the modernisation of our National Payment System, with emphasis on interoperability between digital payment platforms and commercial banks, as well as strengthening financial education and consumer protection,” the governor stressed.

This development, he also said in his speech, “has allowed the number of e-money accounts to almost double, from 11.9 million in December 2022 to 23 million in June 2025, demonstrating the rapid expansion of digital financial services and their growing integration into the daily lives of Mozambican families”.

Source: Lusa