The Mozambican Association of Banks (AMB) said this Friday that the "Prime Rate" reference interest rate will remain at 18.6% for the second consecutive month.

The rate calculated by AMB and the Bank of Mozambique (BM) is based on a single index of 13.3% (calculated by the central bank) which remains unchanged and a cost premium of 5.3% (defined by AMB) also unchanged.

The benchmark interest rate of 18.6% was set on October 1, after a decrease of 30 basis points compared to the previous month.

The WB and AMB decided on the creation of the benchmark interest rate in June 2017 to eliminate the proliferation of benchmark rates in the cost of currency. In that period, it was launched with a value of 27.75% and has dropped 915 basis points since then.

According to the promoters, the goal is that all credit operations will be based on a single rate, "plus a margin, which will be added to or subtracted from the reference interest rate through risk analysis" of each contract.