The Mozambican Banking Association (AMB) has announced that the reference interest rate for credit operations in the country will remain at 21.20 per cent in August. This rate remains unchanged after a series of reductions since the beginning of the year.
According to information from Lusa, since 2018, the rate, known as the ‘prime rate’, has shown a gradual decline until it reached a minimum of 15.5 per cent in February 2021. From that date, the rate began to rise, reaching 24.10 per cent in July last year. In January 2024, the rate fell to 23.50 per cent, a figure that remained constant in February. In March, it was adjusted to 23.10%, in April to 22.70%, in May to 22.30%, in June to 22% and finally in July to 21.20%.
The previous increases in the prime rate were associated with the increase in the monetary policy interest rate (MIMO rate) by the Bank of Mozambique, with the aim of controlling inflation. However, on 31 July, the Monetary Policy Committee (CPMO) decided to reduce the MIMO rate from 15% to 14.25%, with the expectation that inflation will remain in single digits in the medium term.
“The previous increases in the prime rate were associated with the increase in the monetary policy interest rate (MIMO rate) by the Bank of Mozambique, with the aim of controlling inflation”
The prime rate was established in 2017 to serve as a single reference rate for credit operations, with the aim of simplifying the calculation of credit costs, and is adjusted based on the risk analysis of each contract.
Earlier this year, the AMB announced that the reference interest rate for credit operations in the country would fall to 23.10 per cent in March, the second drop in three months.
