The Bank of Mozambique (BdM) announced today, through the Monetary Policy Committee (CPMO), a new reduction in the monetary policy interest rate, known as MIMO, from 13.5%, in force since the end of September, to 12.75%.

According to the BdM, "this decision is underpinned by the continued consolidation of the outlook for single-digit inflation in the medium term, despite uncertainties regarding the duration of the post-election tension and its impact on the prices of goods and services."

"This session of the CPMO was preceded by the meeting of the Bank of Mozambique's Financial Stability and Inclusion Committee, which made an assessment of systemic risk and main vulnerabilities, also reflected in this communiqué, and concluded that the national financial system remains solid and resilient," said the central bank, pointing out that the outlook for inflation remains in the single digits in the medium term.

In addition, the BoM explains that even in the medium term, moderate economic growth is expected, stating that "in the third quarter of 2024, gross domestic product (GDP) growth, excluding liquefied natural gas (LNG), stood at 2.8%, after 3.6% in the previous quarter, and is expected to remain modest until the end of 2024". In this sense, when LNG is included, GDP grew by 3.7 %, after 4.5 % in the previous quarter.

"Despite the prevalence of uncertainties regarding the impacts of post-election tension and climatic shocks on agricultural production and various infrastructures, economic activity is expected to grow moderately in the medium term," he said.

(Photo DR)