The Central Bank of Mozambique lowered benchmark MIMO interest rate by 75 bps to 14.25 percent on December 13th 2018. It is the fifth cut and last one in the year, bringing borrowing cost to the lowest since 2016. Policymakers said that the decision is based on the medium-term projections that continue to indicate the inflation rate in a single digit. The annual inflation rate fell for the third consecutive month to 4.27 percent in November from 4.75 percent in October, driven by lower prices of food and non-alcoholic beverages and transport. The Committee also noted the risks linked to the sustainability of the public debt and the uncertainties regarding the evolution of administered prices. The lending facility rate and the deposit facility interest rate were also cut by 75 bps to 17.25 percent and 11.25 percent, respectively. The required reserve ratio for foreign and domestic currency were left unchanged at 14 percent and 17 percent. Interest Rate in Mozambique averaged 13.18 percent from 2009 until 2018, reaching an all time high of 23.25 percent in October of 2016 and a record low of 7.50 percent in November of 2014.
Interest Rate in Mozambique is expected to be 15.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Mozambique to stand at 9.00 in 12 months time. In the long-term, the Mozambique Interest Rate is projected to trend around 10.00 percent in 2020, according to our econometric models.