Commercial banks, which beat the Central Bank by raising their interest rates during the month of January, have again raised the cost of money in Mozambique. For Mozambicans who only have access to Microfinance institutions, the monthly cost of a loan reaches close to 50 percent at Bayport and exceeds 70 percent at Socremo.

Reflecting the increase in the Monetary Policy Interest Rate (MIMO Rate), revised at the end of March by the Bank of Mozambique from 13.25 percent to 15.25 percent, the Mozambican Association of Banks (AMB) decided that the "Prime Rate" to take effect in May 2022 will rise to 19.10 percent.

Recall that @Verdade revealed that in January, and although the Prime Rate was unchanged from mid-2021, commercial banks revised upwards the cost of loans in Mozambique, with, for example, the interest rate on lending operations for a 1-year maturity increasing by 120 basis points to 18.80 percent.

With this "Prime Rate" Mozambicans should pay about 25 percent interest for consumer credit, home loans or other types of loans they have at the commercial bank.

Since interest rates skyrocketed to double digits in 2016, commercial banks have increased their billion-dollar profits every year. For example, last year the Commercial and Investment Bank made a new unprecedented profit: 13.4 billion Meticais.

For the poorest Mozambicans who only have access to microfinance institutions, the cost of money is close to 50 percent at Bayport and more than 70 percent at Socremo.

The cost of money is expected to continue rising in Mozambique as the Central Bank is expected to further tighten its Monetary Policy in the coming months to contain escalating inflation. (Operanewsapp/Truth)