Mozambique's central bank maintained its benchmark standing facility rate at 8.25 percent, continuing to pursue a "prudent" monetary policy stance in light of international and domestic risks.
The Bank of Mozambique, which has kept rates steady since October last year, also said it would intervene in interbank markets to reach its target of a monetary base of 47.533 billion meticais in May, up from a target of 46.451 billion in April, the bank said in statement from May 12.
Inflation in Mozambique in the first four months of the year continues to reflect the impact of floods earlier this year that hit the production and supply of agricultural products, particularly fruits and vegetables as well as coal and firewood.
Nevertheless, inflation eased slightly to 2.87 percent in April from 3.0 percent in March in light of the seasonal impact of fresh harvest along with the stability of the metical currency against the U.S. dollar and the South African rand following some pressure at the start of the year when the metical fell to 32.45 to dollar in mid-February from 30.0 at the end of 2013.
Since then the metical has firmed slightly, quoted around 31.40, down 4.4 percent this year.
Mozambique's economy expanded by 7.0 percent last year, according to provisional data, in line with the central bank's forecast, but down from 7.3 percent in 2012. Growth was led by a 8.97 percent growth in the services sector, along with higher output from the mining, construction, transport and communications sectors.
The International Monetary Fund forecasts 2014 growth of 8.3 percent and 5.6 percent inflation.