Africa-Press – Mozambique. The reference interest rate for credit in Mozambique will fall by 10 basis points in April, to 15.50%, marking the third cut this year, the Mozambican Banking Association (AMB) announced today.
Since January 2024, the rate, known as the ‘prime rate’, has been gradually declining after six consecutive months at a peak of 24.1%. This year, in January, the AMB also decided to cut the rate by 10 basis points to 15.70% and in February kept it unchanged, despite the central bank’s decision to lower the policy rate.
Identical cuts of 10 basis points followed in March and now in April.
Fluctuations in the ‘prime rate’ are linked to the central bank’s monetary policy rate (the MIMO rate, which influences the formula used to calculate the ‘prime rate’) to control inflation.
The Bank of Mozambique maintained the MIMO monetary policy rate at 9.25% this month, after 12 consecutive cuts since January 2024, in light of the “substantial worsening” of risks, revising inflation forecasts upward.
“This decision stems from the materialisation and substantial worsening of certain risks and uncertainties associated with inflation projections, notably including the Middle East conflict and its impacts on the logistics chain, as well as on the supply and prices of energy and food products, which influenced the upward revision of inflation forecasts,” announced the central bank governor, Rogério Zandamela, on 23 March.
The position was taken at the end of the Monetary Policy Committee (CPMO) meeting, which is held every two months, as explained by the governor of the Bank of Mozambique, highlighting the consequences for Mozambique of the Middle East conflict, as well as of the country’s floods during the current rainy season.
“In this context, the CPMO has halted the reduction cycle initiated in January 2024, which lasted over 24 months, making future decisions conditional on the evolution and materialisation of internal and external risks and uncertainties. The risks and uncertainties associated with inflation projections have worsened significantly,” Zandamela warned.
The key policy rate in Mozambique had been set at 17.25% since September 2022, following central bank intervention, which then began consecutive cuts from 31 January 2024, when it was reduced to 16.5%.
In March of last year, the Bank of Mozambique decided to lower the rate to 15.75%, with cuts repeated at every subsequent meeting, reaching 9.75% in September, 9.50% in November, and 9.25% in January, before now suspending the cycle of reductions.
“Externally, attention is drawn to the duration and magnitude of the impact of the geopolitical conflict in the Middle East on the logistics chain, as well as on the supply and prices of energy and food products. Domestically, there are uncertainties regarding the magnitude of the impact of climate shocks on the logistics chain and the supply of goods,” Zandamela noted, addressing current concerns.
Other concerns, he warned, include “the pace of restoration of productive capacity, particularly following the floods and inundations” and “the effects of persistent fiscal risk, notably delays in payments due by the State.”
“Inflation forecasts have risen and been revised upward. In February 2026, annual inflation stood at 3.2% after 3% in January,” he added, noting that “in the short and medium term, a rise in prices is expected.”
