Mozambique Central Bank Keeps Benchmark Rate at Record Low 8.75%

Mozambique’s central bank maintained its benchmark interest rate as inflation decelerated.

The permanent lending facility was kept at 8.75 percent, the lowest since December 2008 when the rate was introduced, the Maputo-based Banco de Mocambique said in a statement posted on its website today.

Mozambique has cut the rate by 6 percentage points since last year to stimulate the economy of the southern African nation, site of the world’s largest discovery of natural gas in the past decade. Annual inflation slowed for a third consecutive month in August, decelerating to 4.3 percent, the statistics agency said yesterday.

“The monetary policy committee saw a trend of a stronger alignment of inflation with goals set for 2013 and 2014 and considered important to maintain a prudent monetary policy stance given prevailing risks in the international environment,” the committee said.

The bank also maintained the lenders’ compulsory reserves ratio at 8 percent and the deposit rate at 1.5 percent, it said.

The Monetary Policy Committee will make its next rate decision on Oct. 16.

To contact the reporter on this story: William Felimao in Johannesburg at wfelimao@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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