Mozambique Leaves Monetary Policy Unchanged

At its March 12th, 2014 meeting, the Bank of Mozambique decided to leave the key lending rate unchanged at 8.25 percent, arguing it wanted to maintain a prudent monetary policy stance to mitigate the effects from recent serious flooding.

The central bank noticed that recent floods destroyed several farmlands and important infrastructures, hurting the economy and people’s life. 

In February, the annual inflation rate slowed for the fifth straight month to a 11-month low of 2.38 percent. Policymakers noticed that seasonal factors, namely the floods and higher prices for school materials and school fees, together with the Metical depreciation against the U.S. Dollar and the Rand and rising inflation in South Africa explain the trend in consumer prices for the last two months. 

The central bank also said it will intervene in the interbank markets in order to ensure that the stock of base money does not surpass 44657 million Meticais at the end of March of 2014. The deposit facility rate and the reserve requirements ratio were left on hold at 1.5 percent and 8.0 percent, respectively.

Mozambique Leaves Monetary Policy Unchanged

Joana Taborda |
3/12/2014 5:23:24 PM