The Bank of Mozambique’s Monetary Policy Committee (CPMO) held the MIMO policy rate at 9.25% and approved a new reserve requirement regime from the next maintenance period, citing elevated uncertainty over climate shocks and geopolitical tensions amid a slow economic recovery. Over the past year, the MIMO rate was cut from 9.75% to 9.50% in November 2025 and to 9.25% in January 2026, then held. The 18-month regime will allow banks to deduct from local-currency reserves eligible new financing for companies supporting import substitution or increased exports, with lending priced at MIMO plus up to 150 basis points depending on purpose. Annual inflation slowed to 6.5% in August from 7.5% in July, but the central bank expects a near-term increase before inflation eases to single digits over the medium term. Real gross domestic product grew 1.7% year on year in the second quarter, while persistent domestic and external public debt arrears continued to disrupt financial-market functioning. Foreign-exchange turnover remained high and the metical broadly stable, supported by liquefied natural gas projects and extractive industries. Risks remain centred on geopolitical tensions in the Middle East and Europe and their potential effects on global fuel and food prices. The CPMO reaffirmed its price-stability commitment and said it would monitor risks and take corrective measures if necessary.
Bank of Mozambique Holds Policy Rate at 9.25%
The Bank of Mozambique held the MIMO policy rate at 9.25% and approved an 18-month reserve requirement regime allowing banks to deduct eligible local-currency financing for import substitution or export growth, priced at MIMO plus up to 150 basis points. Annual inflation slowed to 6.5% in August, while the economic recovery remained weak and climate and geopolitical risks elevated.