Credit to Mozambique's economy contracted 0.4% in July to 3.9 billion euros, extending a downward trend that began after a peak recorded in May, according to data from the Bank of Mozambique (BdM).
The central bank's latest statistical report shows that credit extended in July fell from the 4 billion euros recorded in June, though it remained above the 3.93 billion euros registered in the same month of 2025.
Lending to individuals continued to lead by sector, reaching 1.44 billion euros, up 0.5% from June. The trade sector followed, posting a 5% increase to 350 million euros.
Transport and communications recorded growth of 1.7% to 330 million euros, while manufacturing advanced 6.7% to 301 million euros.
Despite the overall contraction in credit, borrowing costs continued to ease. The average interest rate on one-year loans fell to 21.27% in July, down from 22.02% in June and 23.04% in the same month of 2025.
Over the same period, the average return on one-year deposits declined to 3.81%, compared with 4.23% in June and 6.24% in July 2025.
The reference interest rate used in the calculation of lending rates — known as the prime rate — held at 15.50% in September for the fifth consecutive month, following three cuts of 10 basis points carried out earlier in the year.
The prime rate has been declining progressively since January 2024, after remaining for six months at a peak of 24.1%. Its trajectory is linked to the MIMO rate, set by the BdM to influence monetary conditions and support inflation control.
In July, the central bank kept the MIMO rate at 9.25%, citing a reduction in local-currency liquidity in the banking system and risks associated with the inflation outlook.
"This decision is supported by the reduction in local-currency liquidity in the banking system, resulting from the increase in the mandatory reserve coefficient in May, notwithstanding the prevalence of elevated risks and uncertainties associated with inflation projections," said then-governor Rogério Zandamela.
The decision was taken at a meeting of the Monetary Policy Committee (CPMO) in Maputo, following 12 consecutive cuts to the MIMO rate since January 2024. The next CPMO meeting is scheduled for 30 September.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/09/25/economia/bdm-credito-a-economia-recuou-em-julho/
