Thursday, October 13, 2011

Bank of Mozambique Holds Lending Rate at 16.00%

The Bank of Mozambique kept its standing facility lending interest rate at 16.00%.  The Bank said [translated]: "the main economic indicators evolve positively, in line with plans for this year, highlighting the components of the external sector and inflation projections, short and medium term; although risks remain to be taken into account. It is essential in this time of year to enhance coordination of policies aimed at consolidating macroeconomic stability and recommended both to the private sector and the economic agents in general, in a framework of exchange rate stability in the country, to ensure the timely supply to market of commodities.

Previously the Bank cut held its interest rate unchanged, after raising 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 7.8% in September, compared to 7.9% in August, 7.7% in July, and 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.  

Mozambique's 3-month Treasury bills traded at 14.20% on the 6th of October.  Mozambique's currency, the Metical (MZN) last traded around 26.7 against the US dollar.


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