The Bank of Mozambique announced on Wednesday (28 January) a reduction of the monetary policy rate (MIMO rate) from 9.50% to 9.25%, marking the 12th consecutive cut since the start of the easing cycle in January 2024.
According to an official statement, the decision was made by the Monetary Policy Committee (CPMO), which met in Maputo, and is based on projections indicating that inflation will remain at low levels in the medium term.
Despite significant ongoing risks — notably the possibility of floods, escalating geopolitical tensions, and delays in domestic public debt payments — the central bank believes that the inflation trajectory remains under control.
In December 2025, annual inflation stood at 3.2%, down from 4.4% in November. Core inflation also showed a slowdown, reflecting the stability of the metical, restrained domestic demand, and moderation in international prices. The CPMO considers these factors as justification for the current rate cut, while warning that the country is approaching the end of the current MIMO rate easing cycle.
“Despite significant ongoing risks — notably the possibility of floods, escalating geopolitical tensions, and delays in domestic public debt payments — the central bank believes that the inflation trajectory remains under control.”
— Bank of Mozambique
At the macroeconomic level, third-quarter 2025 data indicate a modest recovery. Excluding liquefied natural gas (LNG), gross domestic product (GDP) grew by 1.3%, following a 1.7% contraction in the previous quarter. Including LNG, GDP contracted by 0.9%, highlighting the persistent effects of climate shocks and the slow restoration of domestic goods and services supply. Conversely, domestic public debt continues to deteriorate, adding pressure to the financial system. The stock of domestic debt now stands at USD 7.6 billion, an increase of USD 174 million compared to December 2025.
The central bank emphasizes that delays in government debt payments continue to compromise market liquidity and discourage demand for public securities, keeping interbank interest rates elevated.
Governor of the Bank of Mozambique, Rogério Zandamela, reiterated that “the monetary policy stance will remain prudent,” depending on the evolution of risks and uncertainties affecting inflation and national macroeconomic stability.
The next Monetary Policy Committee meeting is scheduled for 30 March 2026, when reference rate conditions may be reviewed again.
Source: Diário Económico
