Tuesday, September 13, 2011

Bank of Mozambique Holds Interest Rate at 16.00%

The Bank of Mozambique held its standing facility lending interest rate at 16.00%.  The Bank said [translated]: "The Monetary Policy Committee believes that the Mozambican economy progresses in line with the main macroeconomic targets set for 2011, to evaluate reported interim results for the first half of the year and the projected short- and medium in which the analysis is based, even if the risks outweigh global economic slowdown. The exchange rate developments that the country notes in the last 12 months and its recent situation reinforce the predictions of a more favorable inflation... the Monetary Policy Committee decided to keep interest rates unchanged... and to intervene in the interbank markets, to ensure that the monetary base does not exceed 33,800 million MT at the end of September 2011."

Previously the Bank cut its key lending rate by 50bps to 16.00% at its August meeting, after raising the rate by 100 basis points to 16.5% at its January meeting this year, where it also raised the interest rate paid on deposits by 100 basis points to 5%, and lifted the required reserve rate by 25 basis points to 9%.  Mozambique saw inflation in it's largest city, Maputo, of 7.9% in August, up from 7.7% in July, but lower than 9.3% in June.  Mozambique's economy expanded 6.8% in the June quarter, compared to GDP growth of 8.1% in the March quarter, meanwhile the IMF is forecasting economic growth of 7.5% in 2011 and 7.8% in 2012.  The Bank of Mozambique next meets to review monetary policy settings on the 12th of October.


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