Mozambique's central bank cut its benchmark standing facility rate by 50 basis points to 8.25 percent, saying the current trajectory of economic growth and inflation is consistent with its plan.
It is the third rate cut this year by the Bank of Mozambique, which has now cut its benchmark rate by 125 basis points following earlier cuts in June and August.
The central bank also said it would intervene in interbank markets to ensure the monetary base does not exceed 44.729 billion by the end of October, up from its target of 43.817 by end-September.
Mozambique's inflation rate rose marginally to 4.52 percent in September from 4.34 percent in August, still below this year's high of 4.9 percent in May when inflation accelerated due to higher food prices caused by extensive flooding at the start of the year.
Mozambique's net international reserves rose by about $US 5.33 million to $2.8775 by the end of September, about 256.5 million above the bank's target.
At the end of September, the metical was trading at 29.86 to the U.S. dollar, a monthly depreciation of 0.03 percent for a cumulative and annual depreciation of 1.19 percent and 3.90 percent, respectively.
Mozambique's Gross Domestic Product expanded by 6.2 percent in the second quarter from the first for annual growth of 8.7 percent, sharply above the first quarter's rate of 4.3 percent.