Mozambique’s benchmark interest rate will remain at 18.9% in June, the Mozambican Association of Banks (AMB) announced on Monday.
The figure is calculated by AMB and Banco de Moçambique based on a single index of 13.3% (calculated by the central bank) and a cost premium of 5.6% (set by AMB).
The announcement comes in line with the decision of the Monetary Policy Committee (CPMO) of the Bank of Mozambique, which on 19 May kept the monetary policy interest rate (MIMO rate) at 13.25%.
At the time, the rate was based on “the worsening risks and uncertainties, despite the downward revision of the inflation outlook in the short and medium-term, mainly reflecting the recent appreciation of the metical.
The creation of the ‘prime rate’ with an initial value of 27.75% was agreed between the central bank and the Mozambican Association of Banks (AMB) in June 2017 to eliminate the proliferation of reference rates in the cost of money.
The aim is for all credit operations to be based on a single rate, “plus a spread, which will be added to or subtracted from the prime rate by risk analysis” of each contract, the promoters explained.
