The Bank of Mozambique’s Monetary Policy Committee has decided to introduce a minimum liquidity ratio, setting it at 25%, “as a percentage of short-term commitments invested in liquid assets,” the central bank said in a statement released on Monday in Maputo.
“This alert indicator fills the existing gap in the current prudential indicators for monitoring and controlling the liquidity of the banking system,” said the statement on the central bank’s website.
The central bank also reported that the Committee also decided to keep the MIMO rate at 21.75%, the marginal lending rate at 22.75% and deposit rate at 1.25% and the reserve requirement ratio for liabilities in local and foreign currency at 15.50%.
These decisions stem from the need to strengthen “prudence in the conduct of monetary policy” in view of the prospects for greater economic activity in the second half of the year, the increase in fiscal risk and future adjustments in administered prices.
In a meeting with the press to announce these decisions, the Governor of the Bank of Mozambique, Rogério Zandamela, said that the inflation rate is expected to be 14% this year, compared to 25% registered in 2016.
Zandamela highlighted the “prospects of greater dynamism of economic activity in the second quarter of 2017,” noting that until May, expected appreciation of the currency led gross international reserves to reach US$2.2 billion.