Associação Moçambicana de Bancos (AMB) announced, this Monday, that the Prime Rate will remain at 18.6% in February, i.e. for the fifth consecutive month.

A decrease of 30 basis points led to the prime rate being set at 18.6% on October 1, 2021 relative to the previous month of the same year, which has remained unchanged since then.

The rate calculated by AMB and Banco de Moçambique is based on a single index of 13.3% (calculated by the central bank) that remains unchanged and a cost premium that also remains at 5.3% (defined by AMB).

Last year saw the benchmark rate rise to 17.8% in March 2021, after starting at 15.5%, and in April rise to 18.9%, and then fall to the current value.

The Bank of Mozambique and the Bankers' Association have agreed to create the exchange reference rate to eliminate the proliferation of reference rates on the cost of money.

At the time, it was launched with a value of 27.75% and has dropped 915 basis points since then.

The goal is that all credit operations will be based on a single rate, "plus a spread, which will be added to or subtracted from the prime rate according to the risk analysis" of each contract, explain the promoters.