Mozambique sees stable inflation and lowers interest rates by 75 basis points

Mozambique’s central bank stated that it expected inflation to stay in single digits over the medium term despite persistent internal uncertainties, and it lowered its main interest rate by a significant 75 basis points on Friday for the ninth consecutive policy meeting.

At its most recent meeting in March, the Bank of Mozambique decreased its primary lending rate by 50 basis points, from 11.75% to 11.00%. This cut was larger by 75 basis points.

Rogerio Zandamela, the governor of the central bank, stated that the medium-term single-digit inflation projection was “consolidated, partly supported by (a) a favorable trend in international prices of goods and services.”

Despite ongoing domestic risks and uncertainties related to the projections, he continued, “the national financial system remains stable and resilient.”

The annual inflation rate in the Southern African nation slowed to 3.99% in April (MZCPIY=ECI), down from 4.77% in March. This has been the case since the disputed election in October, when the Frelimo party was able to hold onto power and extend its five-decade rule, despite criticism from observers that the vote was not free and fair.