Mozambique: Prime rate to stay at 19.5% for fifth month

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Mozambique: Prime rate to stay at 19.5% for fifth month

8:43 CAT | 30 May 2019

File photo: Lusa

Mozambique’s prime rate is to say at 19.5% in June the Association of Mozambican Banks said on Thursday in a communique.

This rate has not changed since February and it is the first time the rate has not fallen for so long since it was introduced.

The creation of the prime rate was agreed on 17 May 2017 by the central bank and the Association of Mozambican Banks to eliminate the proliferation of reference rates for loans.

The idea was that all credit operations were to be based on a single rate, “plus a spread that would be added or subtracted from the prime rate depending on the risk analysis” of each contract, the organisers said.

In another table published by the Association of Mozambican Banks and the central bank presented the standard spread of 17 different banks.

Depending on the bank, the spread for individuals varied between 2.50 and 30.20 percentage points for consumer credit and between 1.0 and 6.0 for mortgages.

Company credit could be as low as zero or as high as 21.80 points for loans of up to one year for between 1.0 and 21.80 points for longer maturities.

Source: Lusa