The Monetary Policy Committee (CPMO) of the Bank of Mozambique has decided to maintain the monetary policy interest rate (MIMO rate) at 17.25%, as it had done in January.
“This decision is supported by the maintenance of the outlook for single-digit inflation in the medium term, notwithstanding the materialization and worsening of some risks,” the CPMO said in a statement.
Among the risks are the occurrence of natural disasters and increased pressure on public spending.
Inflation accelerated from 9.78% to 10.3% in February, mainly reflecting the increase in food prices due to floods and prices of administered goods and services.
The Monetary Policy Committee stressed that core inflation, which excludes fruits and vegetables and administered goods, remained stable.
The central bank believes that the measures it has taken, the exchange rate stability, and the downward trend in commodity prices on the international market will serve to return to single-digit inflation, or below 10%, in the medium term.
The bad weather in the first quarter of 2023 leads the central bank to predict moderate economic growth.
“Excluding the energy [gas extraction] projects underway in the Rovuma Basin, even slower GDP growth is expected, due essentially to the impact of recent weather shocks on agricultural production and various infrastructures,” concludes the statement, quoted by Lusa.
With information from Forbes