The Bank of Mozambique announced the reduction of its main interest rate, known as the MIMO rate, from 15.75% to 15%. The decision was announced by the governor of the central bank, Rogério Zandamela, during the presentation of the measures adopted by the financial regulator.
The justification for this reduction is based on the prospect that inflation will remain in single digits in the medium term. Zandamela said that the assessment of the risks and uncertainties associated with the projections remains favorable, as well as highlighting the stability of the national financial system.
In the current economic context, annual inflation registered 3.3% in April 2024, after marking 3% in March. Underlying inflation, which excludes fruit, vegetables and goods with administered prices, remained stable. These indicators reinforce the expectation of single-digit inflation in the medium term.
Zandamela emphasized the solidity of the banking sector, highlighting a solvency ratio of 25.1% in March, above the regulatory minimum of 12%, and a liquidity ratio of 43.6%, also above the regulatory level of 25%. The solvency stress test showed that the banking sector has sufficient capital reserves to cope with potential losses.
As for systemic risk, which assesses the potential contagion effect resulting from disturbances in the banking system, Zandamela considered it to be moderate. This reflects the gradual recovery of economic activity, the stability of the metical and the recent evolution of inflation.
The Central Bank will continue with the process of normalizing the MIMO rate over the medium term, adjusting the pace and magnitude according to the inflation outlook and the assessment of underlying risks. The next meeting of the Monetary Policy Committee is scheduled for July 31, 2024.
