The Bank of Mozambique (BM) held a public presentation on the economic environment and inflation outlook (CEPI), this Friday (08). This is the first session since the institution adopted the MIMO rate as the main monetary policy instrument in April 2017.

The presentation, with press coverage, was made by the Director of the Economic Research Department, Pinho Ribeiro, and focused on the domestic and international economic environment and the respective outlook, as well as on the latest decisions of the Monetary Policy Committee (MPC) of March 2022 and the rationale for the measures taken, with emphasis on the increase in the MIMO rate, to 15.25%.

Regarding the international economic situation and perspectives, the shock caused by the conflict between Russia and Ukraine, which resulted in a slowdown in global growth prospects for 2022; the worsening of the prices of major import and export commodities; the acceleration of inflation with an impact on the adjustment of monetary policy interest rates, which in turn contributed to the strengthening of the US dollar against major currencies.

At the domestic level, the prospects for recovery in economic activity are maintained, both by the reopening of the economy, after a long period of restrictive measures adopted by COVID-19, and by the execution of the Temane and Rovuma energy projects, and the resumption of the financial assistance program by the International Monetary Fund.

It should be noted that CEPI is an additional vehicle for communicating monetary policy decisions and aims to share in detail the factors and rationale of the measures taken by the CPMO, with the purpose of broadening the public's understanding of the transmission mechanism of monetary policy decisions to the economy.

Read the report here.