Praia, May 12, 2025 (Lusa) - The Bank of Cabo Verde (BCV) announced on Monday the it will maintain its main monetary policy interest rates, after closing the spread differential with Europe that was attracting foreign currency abroad, the institution announced.

The key interest rate will remain at 2.5%, 10 basis points above the latest update of the key rate from the European Central Bank (ECB).

In other words, "now the differential of some rates is positive, in favour of Cabo Verde," noted Óscar Santos, governor of the BCV, at a press conference.

"The last one that was negative was completely closed. Therefore, it is hoped that this incentive to invest funds [by banks] abroad will be reduced or eliminated and that there will be more inflow of foreign currency into Cabo Verde, in defence of the exchange rate regime," he added.

"We have a space in terms of [foreign currency] reserves of six months of imports," said the governor, giving a comfortable margin for monetary management.

According to today's announcement by the BCV, the key interest rate (TRM) will remain at 2.5%, the marginal lending rate (FPC) will remain at 2.75%, the rediscount rate will remain at 3.5%, the minimum cash reserve ratio (DMC) will remain at 10% and the marginal liquidity absorption rate (FPA) will rise from 1.95% to 2.25%.

According to the BCV, the decision to maintain rates reflects the uncertain and volatile context the world is going through, which is reflected in fluctuations in the prices of resources and raw materials.

The scenario led the Cabo Verdean central bank to revise downwards its economic growth forecasts for the country and to reclassify the inflation outlook upwards.

The growth forecasts have shrunk to 5.5% (2025) and 5% (2026) - they were 5.6% and 5.3% respectively in November.

The average inflation outlook for 2025 and 2026 "has been revised upwards to 1.8 % and 1.4 % respectively", up from 0.8 % in November for both years.

LFO/AYLS // AYLS

Lusa