MAPUTO, May 25 – Mozambique maintained its benchmark interest rate for a second consecutive meeting as policymakers weighed growing inflation risks linked to higher global energy costs and mounting pressure on the domestic economy.
The Banco de Moçambique kept its benchmark interest rate unchanged at 9.25%, according to Governor Rogerio Zandamela.
The decision comes as inflationary pressures have begun to intensify following recent increases in global oil prices.
Annual consumer inflation accelerated to 4.4% in April, reaching its highest level since October, with higher energy costs increasingly filtering through to domestic prices.
The rise in inflation follows broader disruptions in global energy markets that have pushed up fuel costs and created additional pressure on import-dependent economies.
Mozambique’s economic challenges extend beyond inflation.
The southeastern African economy contracted by 0.5% last year, highlighting persistent vulnerabilities as fiscal pressures continue to strain public finances.
Government spending obligations have also remained elevated, with debt servicing and public sector salaries accounting for a large share of tax revenues.
Authorities recently increased diesel prices by 46%, while supply shortages at fuel stations prompted government intervention aimed at improving fuel availability across the country.
Businesses have also faced foreign-exchange challenges, with dollar shortages affecting operations for several months.
Meanwhile, Mozambique’s currency, the metical, has remained broadly stable against the U.S. dollar since 2021 despite calls from international institutions for greater exchange-rate flexibility.
The latest policy decision underscores the balancing act facing policymakers as they seek to contain inflation while supporting an economy still navigating fiscal constraints and broader external pressures.
