The Mozambican Banking Association (AMB) has announced that the reference interest rate, known as Prime Rate, for credit operations in Mozambique will remain at 23.50% in February, the second consecutive month it has remained at that level.
According to AMB, the Prime Rate has a recent history of significant variations. After reaching its lowest point in February 2021, at 15.5%, the rate began to rise, reaching 23.50% in April and then 24.10% in July, remaining at that level in the following months. In January 2024, the rate returned to the value of April of the previous year, after six consecutive months at 24.10%, and will remain unchanged in February, as decided by the AMB.
These increases in the Prime Rate are associated with the rise in the monetary policy interest rate (MIMO rate), which influences the calculation of the Prime Rate by the Central Bank as a measure to control inflation. The Bank of Mozambique maintained the MIMO rate at 17.25%, as well as the mandatory reserves required of commercial banks.
The creation of the Prime Rate in 2017 was a joint effort by the central bank and the AMB to standardize reference rates on the cost of money, with the aim of simplifying credit operations with a single rate plus a spread determined by the risk analysis of each contract.
