The Monetary Policy Committee (CPMO) of the Bank of Mozambique (BdM), which decided this Wednesday (27) to reduce the monetary policy interest rate, MIMO rate, from 13.50 % to 12.75 %, warns that the pressure on domestic public debt remains high.

"The domestic public debt, excluding loan and lease contracts and outstanding liabilities, stands at 408.1 billion meticais, which represents an increase of 95.7 billion compared to December 2023," says the BdM.

In addition, according to the central bank, despite this high level of domestic debt, the banking sector remains solid, capitalized and resilient, pointing out that last October, "solvency and liquidity ratios stood at 25.8% and 48.6%, respectively, figures above the minimum regulatory levels of 12% and 25%". In turn, the return on assets (ROA) and return on equity (ROE) ratios remained at satisfactory levels, standing at 4.31T3T and 17.91T3T, respectively.

In the same publication, the BdM pointed out that systemic risk, which assesses the potential contagion effect resulting from disturbances in the banking sector, remained at a moderate level. "This reflects the continued gradual recovery of economic activity and the slowdown in inflation, despite the banking sector's exposure to adverse climatic factors and growing public indebtedness," it added.

Meeting for another session yesterday, the BoM's Monetary Policy Committee stated that gross international reserves, excluding major projects, are at levels sufficient to cover around five months of imports of goods and services.

The next ordinary meeting of the CPMO is scheduled for January 27, 2025.

(Photo DR)