Mozambique: Climate, terrorism main threats - Fitch Solutions
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The consultancy Fitch Solutions said on Thursday that the central bank of Mozambique is expected to keep interest rates at 13.25% and that the metical would be stable, averaging 63.92 per dollar this year.
“We anticipate that the Bank of Mozambique will keep the key interest rate at 13.25% this year and that average annual inflation will rise from 5.6% in 2021 to 7.5% this year, which will discourage cutting,” reads an analysis of Maputo’s monetary policy.
“This year, the central bank is also not expected to increase the rate, so as not to disrupt the economic recovery given the impact of the Covid-19 pandemic,” the analysts added in the note seen by Lusa, in which they write that “in 2023 the bank should increase the rate by 75 basis points, to 14%, following inflation and economic growth.”
Regarding the evolution of the Mozambican currency, the consultancy, which is owned by the same owners of financial rating agency Fitch Ratings, wrote that “the metical should remain relatively stable in 2022, reaching the end of the year with an average of 63.92 meticais per dollar.
Rising aluminium and coal prices and rising liquefied natural gas exports will offset the effect of short-term negative sentiment stemming from Russia’s invasion of Ukraine, they add.
“By 2023, we see the metical depreciating slightly, by 1.7%, to an average of 65 meticais per dollar, due to falling aluminium prices and a decline in the value of coal exports,” the analysts concluded.