The Bank of Mozambique has chosen to keep its monetary policy interest rate, known as MIMO, unchanged at 17.25%. This decision was made public in a statement released by the institution's Monetary Policy Committee (CPMO).
The rate has been maintained because of the prevalence of significant risks and uncertainties of an adverse nature. The main contributors to this situation are the stress on public finances and the ongoing and intensified conflict between Russia and Ukraine, despite forecasts of keeping inflation in single digits in the medium term.
In June 2023, annual inflation fell to 6.8%. This decline is largely due to the reduction in food prices, driven by the cooler season and a stable exchange rate. Underlying inflation, which excludes fruit, vegetables and administered goods, also slowed.
The Bank of Mozambique acknowledges that the inflation forecasts still contain high "risks and uncertainties". Domestically, pressure on public spending is expected to continue, particularly with regard to uncertainty over the trend in the prices of administered goods, with a particular focus on liquid fuels.
In addition, during the assessment period, domestic public debt worsened. Excluding loan and lease contracts and the respective arrears, domestic public debt rose to 308.4 billion meticais (approximately 4,372 million euros), an increase of 33.3 billion meticais (about 472 million euros) compared with December 2022.
