After remaining at 21.2 per cent for the second month running in September, the reference interest rate for credit in Mozambique will fall by 0.7 percentage points in October to 20.5 per cent, the Mozambican Association of Banks (AMB) announced.
This is the seventh consecutive cut since 2024, representing financial relief for those who resort to credit in the country, Lusa reported.
Since 2018, the so-called ‘prime rate’ had been falling, having reached its lowest point of 15.5 per cent in February 2021. However, the trend was interrupted and the rate rose again, peaking at 24.1 per cent in July 2023. In 2024, the rate returned to 23.5 per cent in January, after six months of highs, and continued to fall gradually to the current 20.5 per cent in October.
Fluctuations in the prime rate are directly linked to the monetary policy interest rate, known as the MIMO rate, adjusted by the Bank of Mozambique (BdM) to control inflation. On Monday (30), the Monetary Policy Committee (CPMO) decided to reduce the MIMO rate from 14.25 per cent to 13.50 per cent.
‘This decision is underpinned by the continued consolidation of the outlook for inflation in the single digits in the medium term, in a context where the assessment of the risks and uncertainties associated with inflation projections remains favourable,’ explained the BdM in a statement after meeting with the CPMO.
The prime rate was created in 2017 through an agreement between the BdM and AMB, with the aim of unifying the reference rates for credit operations, eliminating the multiplicity of rates on the market. Since then, it has been revised monthly based on prevailing economic and monetary conditions.
