Mozambican “prime rate” for June remains at a five-year high
The prime rate for credit operations in Mozambique in June will be 23.5%, the Mozambican Association of Banks (AMB) announced, the highest rate in the last five years.
According to the data collected by Lusa, one has to go back to May 2018 to find the same value.
Since then, the prime rate dropped to a minimum of 15.5% in February 2021, when the trend reversed, and the rate rose to 23.5% in April.
The increases in the prime rate have been associated with the Central Bank raising the monetary policy interest rate (MIMO rate, which influences the formula for calculating the prime rate) to control inflation.
In the same vein, the Mozambican Central Bank maintained the MIMO rate at 17.25% this week and increased reserve requirements for commercial banks.
The ‘prime rate’ creation was agreed upon in 2017 between the Central Bank and AMB to eliminate the proliferation of reference rates on the cost of money.
At the time, it was launched with a value of 27.75%.
The goal is for all credit operations to be based on a single rate, “plus a margin (spread), which will be added to or subtracted from the ‘prime rate’ through risk analysis” of each contract, explain the promoters.
With information from Lusa
News Mozambique, English news Mozambique, Mozambican economy
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