Mozambique has lowered interest rates for the thirteenth straight time, but mounting risks suggest monetary easing may soon pause.
Mozambique’s central bank has cut its policy rate by 25 basis points to 9.25%, marking its 13th consecutive rate reduction. The decision follows a similar cut in November, but officials signaled that the easing cycle is close to ending due to rising risks.
Central bank governor Rogério Zandamela cited severe flooding, which caused an estimated $644 million in infrastructure damage, alongside trade and geopolitical tensions as key threats to the economic outlook. Inflation slowed sharply to 3.23% in December, its lowest level in over a year, down from 4.38% in November.
Despite this, analysts expect inflationary pressures to return later in the year, driven by budget deficit financing, renewed construction of large liquefied natural gas projects, and potential currency depreciation.
Mozambique is also in talks with the IMF over a new lending programme, which could pave the way for debt restructuring once agreed.
Discover more from DiutoCoinNews
Subscribe to get the latest posts sent to your email.
