Mozambique Raises Interest Rates as Inflation Pressures Grow

Mozambique’s central bank raised the benchmark interest rate as a drought in the southern and central regions of the country and floods in the north threatened to fuel inflation.

Policy makers increased the rate by 100 basis points to 10.75 percent, the Maputo-based institution said in an e-mailed statement on Monday.

“The committee noted the likely impact of the adverse international environment, as well as the expected effects of the drought in the southern and central regions of the country and floods in the northern region,” according to a statement published on the bank’s website.

Inflation in Mozambique accelerated to 11.3 percent in January from 10.6 percent in December. The economy grew 5.6 percent in the fourth quarter of 2015, compared with 4.6 percent a year earlier, the National Statistics Institute said Feb. 5. The committee said the expansion in the fourth quarter had been below forecast.

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