Tuesday, March 13, 2012

Bank of Mozambique Cuts Rate 125bps to 13.75%

The Bank of Mozambique dropped its standing facility lending interest rate 125 basis points to 13.75% from 15.00%.  The Bank said [translated]: "The Monetary Policy Committee noted the results of inflation, which are favorable, and analyzed the predictions of short and medium term for this indicator, as well as the environment of stability that the financial sector observed and considered to have conditions for enlargement of the space money in order to facilitate bank financing to the private sector of the economy, contributing to the GDP growth targets set for this year, against a backdrop of low inflation and controlled."

Previously the Bank held rates unchanged, after it 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 6.7% in the September quarter, compared to 6.8% in the June quarter and 8.1% in the March quarter.

Mozambique's currency, the Metical (MZN) last traded around 27.40 against the US dollar.  The Bank of Mozambique next meets on the 11th of April this year.


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