Maputo, Aug. 1, 2025 (Lusa) - The Monetary Policy Committee (CPMO) of the Bank of Mozambique has cut the MIMO monetary policy interest rate for the ninth consecutive time, by 75 basis points, to 10.25%, announced Governor Rogério Zandamela.
“This measure stems mainly from the continued consolidation of the outlook for single-digit inflation in the medium term, reflecting in part the favourable trend in international commodity prices, alongside the presence of risks and uncertainties associated with the projections at the domestic level,” the governor said at a press conference in Maputo at the end of the CPMO meeting, which takes place every two months.
The central bank set the key interest rate in Mozambique at 17.25% in September 2022, after the central bank intervened, then started cutting it in January 2024, when it dropped to 16.5%. In March last year, the Bank of Mozambique cut it to 15.75%, in May to 15%, in July to 14.25%, in September to 13.5%, in November to 12.75%, on 27 January this year to 12.25% and in March to 11.75%, followed by a further cut on 30 May to 11.00% and now to 10.25%.
Zandamela added that, in the medium term, “economic activity in Mozambique is expected to show a gradual recovery,” excluding Liquefied Natural Gas production, “supported in part by lower interest rates and the prospects for the implementation of projects in strategic areas”.
According to the statement made by Rogério Zandamela, "the risks and uncertainties associated with inflation projections remain high" and "the impacts of the worsening situation on the State Budget, uncertainties regarding the speed of the restoration of productive capacity and the supply of goods and services, and the effects of climate shocks" stand out as likely factors for an increase in inflation in the medium term.
“The CPMO will continue with the process of normalising the MIMO rate in the medium term. The pace and magnitude will continue to depend on the inflation outlook, as well as the assessment of the risks and uncertainties underlying the medium-term projections,” he added.
PVJ/ADB// ADB.
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