Mozambique must move towards austerity - Luísa Diogo
File photo: Lusa
The reference interest rate for credit operations in Mozambique will remain at 18.6 percent in March, for the sixth consecutive month, the Mozambican Association of Banks (AMB) announced on Wednesday.
The rate calculated by AMB and the Bank of Mozambique is based on a single index of 13.3 percent (calculated by the central bank) that remains unchanged and a cost premium that also remains at 5.3 percent (set by AMB).
The 18.6% ‘prime rate’ was fixed on October 1, after a decrease of 30 basis points in relation to September.
Its creation was agreed between the central bank and the AMB in June 2017 to eliminate the proliferation of reference rates on the cost of money.
At the time, it was launched at 27.75 per cent and has fallen 915 basis points since then.
The aim is for all credit operations to be based on a single rate, “plus a margin (spread), which will be added to or subtracted from the ‘prime rate’ upon risk analysis” of each contract, the promoters explain.