Bank of Mozambique maintains monetary policy interest rate at 13.25%

Banco de Moçambique mantém em 13,25% taxa de juro de política monetária

The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided this Wednesday to keep the monetary policy interest rate at 13.25%, justifying the measure with "the prospects of maintaining inflation at single digits"announced the financial regulator quoted by Lusa. 

The Bank of Mozambique said in a statement that the measure was taken in a context of "increasing risks and uncertainties, with emphasis on the implications of the third wave of covid-19 on the economy. 

The note also states that the CPMO also decided to maintain the interest rates on the Permanent Deposit Facility (FPD) at 10.25% and the Permanent Assignment Facility (FPC) at 16.25%. 

The Required Reserves (RO) ratios for domestic and foreign currency liabilities were also maintained at 11.50% and 34.50%, respectively. 

"The risks and uncertainties associated with inflation projections continue to worsen. Domestically, the growing uncertainty about the impact of the third wave of covid-19 on the economy, with the emergence of more infectious strains, and the continued military instability in the northern zone stand out," the text reads. 

In the external environment, the document continues, the risks and uncertainties associated with the evolution of the pandemic also persist, to which must be added the effects of the recent demonstrations in neighboring South Africa, the strengthening of the US dollar, and the increase in oil and food prices.  

The inflation projections were revised upward, remaining at single digits.  

Annual inflation stood at 5.52% in June, after 5.49% in May, essentially reflecting the depreciation of the metical, notes the Bank of Mozambique. 

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