Mozambique’s benchmark lending rate will remain unchanged at 15.5% in August, marking the fourth consecutive month at that level, following three cuts earlier this year, the Mozambican Banking Association (AMB) announced on Friday, 31 July.
The decision mirrors that of the Bank of Mozambique (BdM), which this week left its MIMO reference interest rate unchanged. The AMB’s prime rate had been declining progressively since January 2024, after six consecutive months at a peak of 24.1%.
In January, the AMB cut the prime rate by 10 basis points to 15.7%, before holding it steady in February. Further cuts of 10 basis points followed in March and April, after which the rate remained stable in May, June, July, and now August.
The prime rate’s trajectory is directly linked to the MIMO monetary policy rate set by the Bank of Mozambique, which feeds into the formula used to calculate the prime rate and is one of the central bank’s primary instruments for controlling inflation.
This week, the BdM held the MIMO rate at 9.25%, citing a reduction in domestic currency liquidity resulting from an increase in the mandatory reserve coefficient approved in May, even as risks and uncertainties over the inflation outlook persist.
“This decision is supported by the reduction in national currency liquidity in the banking system, stemming from the increase in the mandatory reserve coefficient last May, notwithstanding the prevalence of elevated risks and uncertainties associated with inflation projections,” said BdM Governor Rogério Zandamela.
The decision was taken at a meeting of the Monetary Policy Committee (CPMO) held on Tuesday, 28 July, in Maputo. It marks the fourth consecutive meeting at which the central bank has held the MIMO rate steady, having halted in March a cycle of 12 successive cuts that began in January 2024.
In projections released after the meeting, Governor Zandamela anticipated a near-term acceleration in inflation, followed by a return to single-digit levels over the medium term. He noted that year-on-year inflation stood at 7.5% in June, up from 7.2% in May.
“In the short term, prices are expected to continue rising, reflecting the indirect effects of increases in domestic fuel prices and imported inflation. Over the medium term, however, inflation is forecast to return to single digits, explained in part by expectations of continued exchange rate stability and a slowdown in energy and food prices,” he said.
The MIMO rate was held at 17.25% between September 2022 and January 2024. From that point, the BdM embarked on an easing cycle, cutting the rate to 16.5% in January 2024 and continuing with successive reductions throughout the year, until reaching 9.25% in January of this year. Since March, however, the central bank has opted to keep the rate on hold.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/07/31/economia/banca/amb-mantem-taxa-de-juro-inalterada-em-155-pelo-quarto-mes-consecutivo/
