Mozambique’s prime rate to drop from 24.5 to 23.5% in May

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Mozambique’s prime rate to drop from 24.5 to 23.5% in May

12:02 CAT | 27 Apr 2018

Macauhub / File photo

The benchmark interest rate for the Mozambican financial market will fall from 24.5 to 23.5 percent in May, the Mozambican Banking Association and the central bank announced in a statement today.

Fixed month by month, the new ‘prime rate’ value goes into effect from May 1st.

Since December 2017, the rate has been falling at an increasing pace. This is the second consecutive month in which a whole percentage point has been subtracted.

The creation of the Mozambican prime rate was agreed on May 17, 2017, between the central bank and the Mozambican Association of Banks to eliminate the proliferation of different reference rates in the cost of money.

The objective is that all credit operations are based on a single rate, “plus a spread, which will be added to or subtracted from the prime rate after risk analysis”.

At the time, the reference rate debuted at 27.75 percent, and has now fallen 4.25 percentage points.

Source: Lusa