The Monetary Policy Committee of the Bank of Mozambique met today and decided to maintain the monetary policy interest rate (MIMO rate) at 15.25%, it announced in a statement.
“This decision is supported by the prospects of maintaining single-digit inflation [below 10%] in the medium term, despite the high risks and uncertainties associated to these projections,” particularly with the war in Ukraine, it said.
In April, annual inflation “accelerated to 7.9% from 6.7% in March, reflecting rising fuel and food prices.”
“Underlying inflation, which excludes prices of administered goods and services and of fruits and vegetables, and which is impacted by monetary policy, remains stable,” meaning that “for the medium term, we foresee the maintenance of single-digit inflation, favored in part by the stability of the metical,” the Mozambican currency.
On the other hand, “the economic growth outlook for 2022 and 2023 is maintained,” with the Gross Domestic Product (GDP) growing 4.1% in the first quarter of 2022.
The central bank considers that this reflects “the continued easing of restrictive measures to contain covid-19, which mainly boosted hotels and restaurants, and the improvement in external demand which, in turn, favored the performance of the extractive industry.
The next ordinary meeting of the Bank of Mozambique’s Monetary Policy Committee is scheduled for July 27.