Bank of Mozambique Holds MIMO Policy Rate at 9.25%

The Monetary Policy Committee (CPMO) of the Bank of Mozambique held the MIMO policy rate at 9.25%, citing reduced excess local-currency liquidity in the banking system following the May reserve-requirement increase, while noting that elevated inflation risks and uncertainties persist, notably the duration of the Middle East conflict and its impact on logistics, goods supply and international fuel-price volatility. The hold follows cumulative easing of 100 basis points from 10.25% in July 2025 to 9.25% in January 2026, with the rate then unchanged in March and May. The CPMO said inflation is expected to rise in the short term before falling back to single digits over the medium term, with annual inflation at 7.5% in June 2026 after 7.2% in May, while GDP growth excluding liquefied natural gas (LNG) was estimated at 1.1% in the first quarter of 2026 after 4.8% in the last quarter of 2025. It also said public indebtedness and domestic and external debt arrears remain high and continue to affect the normal functioning of the financial market, although the financial stability committee concluded that the financial system remains stable and resilient and that financial inclusion indicators improved. The medium-term inflation outlook is supported in part by exchange-rate stability, but the Bank of Mozambique said the direction of monetary policy will remain conditioned by its assessment of the risks and uncertainties surrounding the inflation projections.