The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided today to lower the MIMO monetary policy interest rate from 12.75%, in force since the end of November, to 12.25%.

"In addition, the CPMO decided to reduce the mandatory reserve coefficients for liabilities in national currency, from 39.0% to 29.0%, and in foreign currency, from 39.50% to 29.50%, with the aim of providing more liquidity to support the economy in restoring productive capacity and the supply of goods and services," says the final communiqué of the CPMO meeting, held today in Maputo.

This decision, according to the CPMO document, stems from the maintenance of a single-digit inflation outlook in the medium term, despite the increase in risks and uncertainties associated with the projections, especially those arising from post-election tension, fiscal risk and climate shocks.

In the same document, it is added that the outlook for inflation "remains in single digits in the medium term", recalling that in December 2024 "annual inflation increased to 4.15%, after 2.84% in November", reflecting "the reduction in the supply of goods and services resulting from the post-election tension".

The CPMO says in the document signed by the governor of the Central Bank that the pressure on domestic debt has worsened: "Domestic public debt, excluding loan and lease contracts and outstanding liabilities, stands at 435.6 billion meticais, which represents an increase of 20.1 billion compared to December 2024.

The CPMO will continue with the process of normalizing the MIMO rate over the medium term. The pace and magnitude will continue to depend on the inflation outlook, as well as the assessment of the risks and uncertainties underlying the medium-term projections," it concludes.