Maputo, Feb. 2, 2026 (Lusa) - Mozambique's banks have decided to keep the benchmark interest rate for credit unchanged at 15.70% in February, thus not following the central bank's cut in the key rate announced on Wednesday.
The decision was announced by the Mozambican Banking Association (AMB) following the 0.10 percentage-point cut in January.
Since January 2024, the rate, known as the “prime rate”, has been falling steadily after six consecutive months at a high of 24.1%.
Fluctuations in the prime rate are linked to the monetary policy interest rate (MIMO) set by the central bank to control inflation, which influences the formula used to calculate the prime rate.
At its meeting on 28 January, the Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to cut the MIMO monetary policy interest rate for the 12th consecutive time by 0.25 percentage points to 9.25%, predicting its stabilisation but warning of the effects of flooding on prices.
"This decision is supported by the prospects of maintaining single-digit inflation in the medium term, despite some risks and uncertainties associated with inflation projections, with emphasis, as you can imagine, on the occurrence of floods and the intensification of trade and geopolitical tensions. This is the world we are facing right now," announced the governor of the Bank of Mozambique, Rogério Zandamela, at the end of the meeting.
Zandamela's fears relate to the floods in Mozambique since the beginning of January, which have affected more than 720,000 people, caused more than 20 deaths, besieged several towns and villages, blocked roads for weeks, and led to losses provisionally estimated at around €600 million.
"However, in view of the worsening of these risks and uncertainties, the CPMO considers that the end of the MIMO rate reduction cycle that began in January 2024 is approaching," Zandamela added, recalling that the downward trajectory could extend, in the initial forecast, to 36 months.
"The inflation outlook remains in single digits in the medium term. In December 2025, annual inflation stood at 3.2%, after 4.4% in November. We are seeing inflation at a reasonable level, low for our country. This is something we are proud of," he pointed out.
He insisted that "in view of the worsening risks and uncertainties, the CPMO considers that the end of the MIMO rate reduction cycle, which began in January 2024, is approaching.
PVJ/ADB // ADB.
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