The Monetary Policy Committee of Mozambique’s Reserve Bank, Banco de Mocambique (BM) says it will keep benchmark lending rates unchanged at 12.75 percent over the next month. A Central Bank media statement says the Committee highlighted the inflationary pressure caused by political and military tensions limiting the movement of goods and services, the depreciation of the local currency, the metical against the currencies of the country’s major trading partners, and the shortage of agricultural products resulting from the floods and persistent drought that has hit the country.
In addition, it noted that for the second month in a row business confidence has fallen due to “an unfavourable outlook for demand and prices”.
The Central Bank noted that the metical has continued to depreciate against the dollar. On the last day of April the US dollar was quoted on the Inter-Bank Exchange Market at 53.21 meticais, compared with 50.55 meticais at the end of March. The South African rand was quoted at 3.76 meticais, compared with 3.44 meticais a month earlier.
Provisional data also shows that at the end of April the country’s net foreign reserves stood at $1.76 billion, a fall of $67.2 million over the month.
The reserves are enough to cover 3.2 months of imports of goods and non-factor services, when the operations of the foreign exchange mega-projects are excluded.