The Reserve Bank of Mozambique, Banco de Mocambique (BM) says it has kept its benchmark lending rate unchanged at 9.75 percent on Friday after taking into account the challenging macroeconomic outlook for 2016, APA can report on Saturday.This is the highest level the rate has been since 2012.
The Bank said in a statement that annual inflation was seen at 5.6 percent while the economy was forecast to grow 7 percent, but that drought and flooding in some areas posed a risk to the domestic environment.
The bank’s statement says the monetary measures taken in late 2015 had staunched the volatility of the exchange rate, and the Mozambican currency, the metical, has indeed shown signs of a recovery against the US dollar, and particularly against the South African rand.
Between January and November, the metical had depreciated by 73.2 per cent against the dollar, but there was a sharp reversal in the metical’s fortunes in December.
That month saw the metical rise in value by 16.85 per cent on the Inter-Bank Exchange Market, ending the year at 44.95 meticais to the dollar. That brought the devaluation of the metical over the entire year of 2015 down to 42.25 per cent.
The Bank noted that the international prices of key Mozambican exports had fallen substantially in 2015, thus the world market price of aluminium was down by 27.9 per cent, of natural gas by 19.5 per cent, and of thermal coal by 18 per cent.
On the other hand, Mozambique’s fuel bill has been cut by the continuing fall in the price of oil. Over the year, the price of the benchmark Brent crude fell by 34.7 per cent. On 31 December, Brent crude was quoted at $37.28 a barrel, compared with $44.61 in late November.