The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to maintain the monetary policy interest rate, MIMO rate, at 13.25%.

In a statement released Wednesday, the Bank of Mozambique argues that the decision to maintain the MIMO rate is supported by the slightly improved outlook for domestic inflation in the short and medium term, despite worsening risks and uncertainties.

Still, fiscal pressure, climate shocks, and rising oil and food prices on the international market were the risks presented in the country.

Meanwhile, data from the National Statistics Institute (INE) reveal that Mozambique ended 2021 with inflation of 6.7%.

However, the central bank forecasts "a lower acceleration of inflation," reflecting "stability of the metical, despite the prospects of rising food and oil prices on the international market," it said.

In addition, "the outlook for improved economic activity in 2022" is also maintained, thanks to "the relaxation of measures to contain the spread of covid-19, the implementation of natural gas projects in the Rovuma basin, and the increased dynamics of the external sector."

To this end, the Bank of Mozambique warns of the need for "structural reforms in the economy" and refers that "domestic public debt has increased.

In December 2021, domestic public debt, excluding loan and lease agreements and overdue liabilities, "increased by 2.4 billion to 220.6 billion meticais.