Mozambican Central Bank maintains monetary policy rate at 17.25%

“This decision is supported by the maintenance of the outlook for single-digit inflation in the medium term, despite the materialization and worsening of some risks,” the Monetary Policy Committee (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 the “increase in prices of administered goods and services.”

But the CPMO stressed that “underlying inflation, which excludes fruits and vegetables and managed goods, remained stable.”

The Central Bank believes that the measures, the exchange rate stability, and the downward trend in commodity prices on the international market will serve to return in the medium term to “single-digit inflation,” or below 10%.

The bad weather in the first quarter of 2023 makes the Central Bank predict “a more moderate economic growth.”

“Excluding the energy [gas extraction] projects underway in the Rovuma Basin, even slower gross domestic product growth is forecast, due essentially to the impact of recent weather shocks on agricultural production and various infrastructures,” it concluded.

The next regular meeting of the CPMO is scheduled for May 31.

With information from Lusa