Friday, October 17, 2014

Mozambique holds rate, confident will hit inflation aim

   Mozambique's central bank maintained its benchmark standing facility rate at 8.25 percent and said it was "confident" that its inflation target of 6.0 percent for the end of 2014 will be met in light of the favorable behavior of inflation in September and the short and medium-term outlook.
    But the Bank of Mozambique, which has kept its rate steady since October 2013, also said it had noted the risk of a slowing global economic activity,  the volatility in international commodity prices and the resulting impact on its balance of payments.
    During October the central bank will also intervene in interbank markets to ensure that the monetary base hits the goal of 53.786 billion meticais, up from 52.846 billion in September.
    Mozambique's inflation rate eased to 2.23 percent in September from 2.64 percent in August, with the decline in inflation in the last five months due to the greater availability of fruits, vegetables and the stability of the metical's exchange rate that is sustained by adequate foreign exchange reserves.
    At its last meeting on Sept. 15, the central bank said the prospects for inflation to meet its 6.0 percent target was improving.
    Mozambique's Net International Reserves eased by US$ 158.3 to $3.0925 billion at the end of September, the equivalent of 4.3 months of import cover.
    Preliminary data showed that Mozambique's economy expanded by an annual 6.9 percent in the second quarter, the bank said, compared with an annual rate of 7.5 percent in the first quarter


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