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The Economic Studies Unit of Standard Bank has said that leaving Mozambique’s main interest rate at 15% is “surprising”.
“In a surprising decision, the monetary policy committee of the Bank of Mozambique left its benchmark interest rate unchanged at 15.0%,” analysts write. The real interest, they say, is 10%.
The investors note, which Lusa agency has seen, says the economists were expecting “a cut of 50 basis points”, not least because “Mozambique has the highest real interest rate” among the 16 countries covered by the bank’s analysis.
Predicting that inflation “will end the year at 7.7% and remain generally stable in 2019” at an average of 8.1%, analysts point out that “the stability of the metical against the dollar should probably help contain inflationary pressures”.
The municipal elections, which, despite being criticised by the opposition, were generally a “peaceful process”, were also a factor in this perspective of stability.
On Monday, the Bank of Mozambique left its benchmark Interbank Money Market Rate at 15% and the rates on the Permanent Deposit Facility and the Permanent Loan Facility at 12% and 18% respectively.
This is the interest rate used by the central bank to regulate liquidity through its interventions in the interbank money market. It was cut from 15.75 to 15 per cent at the previous meeting of the committee at the end of August.
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