The Bank of Mozambique announced on Friday, May 30, a new reduction of its benchmark interest rate by 75 basis points, setting the MIMO rate at 11.00%, down from the previous 11.75%. This marks the ninth consecutive cut decided by the Monetary Policy Committee, as part of a strategy supported by the expectation of stable, single-digit inflation in the medium term, Reuters reported on Saturday, May 31.
According to the bank’s governor, Rogério Zandamela, the decision is based on the continued downward trend in inflation, amid a favorable evolution of international goods and services prices, despite ongoing domestic risks.
“This measure is mainly driven by the consolidation of single-digit inflation prospects in the medium term, partially supported by favorable trends in international prices,” said Zandamela. Despite domestic risks and uncertainties surrounding macroeconomic projections, the governor assured that the national financial system remains stable and resilient.
According to the latest data, the year-on-year inflation rate in Mozambique slowed to 3.99% in April, down from 4.77% in March. This deceleration follows several months of increases that began after the general elections in October 2024, the results of which were contested by various political forces and international observers, who described the process as neither free nor transparent.
The post-election tensions, which threatened the country’s social and economic stability, have since been followed by ongoing peace and dialogue efforts between the government and opposition parties.
With this latest cut to the MIMO rate, the Bank of Mozambique aims to stimulate access to credit, boost the economy, and curb inflationary pressures amid ongoing domestic and global uncertainty.
The MIMO rate (Mozambique Interbank Money Market Rate) is the reference interest rate used by the Bank of Mozambique as its main monetary policy instrument. It influences the cost of money in the market and serves as a basis for determining the level of other interest rates applied by commercial banks in the country.
The MIMO rate is fundamental to Mozambique’s economy, serving as a benchmark for market interest rates and acting as the central bank’s main tool to control inflation and influence economic activity.
Source: Diário Económico
