Mozambique holds key rate for fourth time, citing elevated inflation risks
TLT•Mozambique’s central bank held its policy rate at 9.25% for the fourth consecutive meeting, citing elevated inflation risks. Annual inflation eased to 6.45% in August from 7.48% in July.
1. Rate remains unchanged
The Bank of Mozambique kept its MIMO policy rate at 9.25% on Wednesday for the fourth consecutive meeting. The bank said inflation was likely to rise in the short term before declining over the medium term.
2. Economic and debt outlook
Governor Felisberto Dinis Navalha said the outlook remained for moderate economic growth. Mozambique’s heavy debt burden remains a challenge; a World Bank and International Monetary Fund debt sustainability analysis has deemed it unsustainable.
3. Lending talks and reforms
Mozambique said this month it hoped talks with an IMF mission would help pave the way for a new lending programme. The fund indicated further reforms may be needed before an agreement is reached.
