Mozambique Central Bank Cuts Key Rate to Lowest Since 2020
(Bloomberg) -- Mozambique’s central bank cut its benchmark lending rate to the lowest level since December 2020, despite post-election unrest that has shaken the southeast African nation’s economy.
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The Banco de Moçambique reduced its so-called Mimo rate by 75 basis points to 12.75%, Governor Rogerio Zandamela said in statement Wednesday. That’s the sixth consecutive such cut this year.
“This decision is supported by the continued consolidation of the single-digit inflation outlook in the medium term, despite the uncertainties regarding the duration of the post-election tension and its impact on the prices of good and services,” Zandamela said.
Mozambique has witnessed continuing unrest since disputed elections on Oct. 9, which extended the ruling party’s 49-year rule. Opposition presidential candidate Venâncio Mondlane rejected the outcome of the vote as fraudulent and called for protests that have led to border closures and port terminal suspensions. Businesses have lost multiple days of trade.
Annual inflation in Mozambique edged up to 2.7% in October, but the turmoil risks adding to price pressure. Economic growth in the third quarter slowed to 3.7% from 4.5% in the three months ended June 30, according to nation’s statistics institute.
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