The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to maintain the monetary policy interest rate at 17.25%.

"This decision is underpinned by the continued outlook for single-digit inflation in the medium term, despite the materialization and worsening of some risks," the CPMO said in a statement.

The CPMO says in its statement that the risks and uncertainties underlying inflation projections have worsened.

Internally, the risks include "the occurrence of natural disasters and increased pressure on public spending".

Inflation accelerated from 9.78% to 10.3% in February, "mainly reflecting the increase in food prices" due to the floods and the "increase in the prices of administered goods and services".

But the CPMO stressed that "underlying inflation, which excludes fruit and vegetables and administered goods, remained stable".

The Bank of Mozambique believes that the measures it has taken, exchange rate stability and the downward trend in commodity prices on the international market will help it return to "single-digit inflation" in the medium term, i.e. below 10%.

The bad weather in the first quarter of 2023 means that the central bank is forecasting "more moderate economic growth".

"Excluding the energy [gas extraction] projects underway in the Rovuma Basin, growth in gross domestic product is expected to be even slower, essentially due to the impact of recent climatic shocks on agricultural production and various infrastructures," he concluded.

The next ordinary meeting of the CPMO is scheduled for May 31.