The Central Bank of Mozambique lowered its benchmark MIMO interest rate by 100 bps to 13.25 percent on June 19th 2019. It is the first rate cut so far this year, bringing borrowing cost to the lowest since 2016. The Committee said that the decision is based on the improvement of the inflation outlook due to the current trajectory and expectations of a lower exchange rate pressure in the domestic market and as the aggregate demand is still below its potential. Policymakers added that they will continue to monitor risks related with inflation. The lending facility rate and the deposit facility interest rate were also cut by 100 bps to 16.25 percent and 10.25 percent, respectively. The required reserve ratio for foreign and domestic currency were left unchanged at 14 percent and 36 percent, respectively. Interest Rate in Mozambique averaged 13.31 percent from 2009 until 2019, 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 13.25 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 13.25 in 12 months time. In the long-term, the Mozambique Interest Rate is projected to trend around 14.50 percent in 2020, according to our econometric models.