The prime rate for credit operations in Mozambique in June will be 23.5%, announced the Mozambican Banking Association (AMB), the highest rate in the last five years.

According to data collected by Lusa, you have to go back to May 2018 to find the same figure.

Since then, the prime rate has fallen to a low of 15.5% in February 2021, when the trend reversed and the rate began to rise until it reached 23.5% in April.

The increases in the prime rate have been associated with the central bank raising the monetary policy interest rate (MIMO rate, which influences the formula for calculating the prime rate) in order to control inflation.

The creation of the 'prime rate' was agreed in 2017 between the central bank and the AMB to eliminate the proliferation of reference rates in the cost of money.

At the time, it was launched with a value of 27.75%. 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 depending on the risk analysis" of each contract, explain the promoters. (Lusa)