Friday, January 13, 2012

Bank of Mozambique Holds Interest Rate at 15.00%

The Bank of Mozambique held its standing facility lending interest rate unchanged at 15.00%.  The Bank also held the required reserve ratio unchanged at 8.5%.  The Bank said [translated]: "In what was the first regular session of 2012, the CPMO noted the main macroeconomic results achieved in 2011, with emphasis on the inflation and international reserves resulting from the contribution of the partner institutions of macroeconomic management, economic operators and the general public, in pursuing the objective of preserving price stability."

Previously the Bank cut the interest rate 25 basis points, and RRR by 25 basis points at its December meeting, and last cut the 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 last 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 7.7% in November, down from 8.3% in October, 7.8% in September, 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.  The Bank noted macroeconomic targets for 2012 of GDP growth of 7.5% and inflation of 5.6%.  

Mozambique's currency, the Metical (MZN) last traded around 27.26 against the US dollar, and according to Bloomberg the Metical had gained about 22 percent against the US dollar in 2012, making it one of the best performing currencies. 


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