Mozambique’s central bank has maintained its key lending rate unchanged at 14.25 percent in a move meant to assist the flood-ravaged country achieve its 2019 economic objectives, the bank said on Friday.
The bank’s Monetary Policy Committee said in a statement that the decision was “based on the medium term prospects” for the Mozambican economy.
“Although these suggest a slight worsening in the inflation rate by the end of 2019, this does not compromise the objective of macro-economic stability,” the committee said.
It revealed that the inflation rate remained “low and stable although there are risks that the inflation rate will speed up.”
“These risks arise from the natural disasters that have struck Mozambique, the trend for the depreciation of the Mozambican currency, and the increase in international fuel prices,” it said.
The Mozambican economy is smarting from the impact of the catastrophic Tropical Cyclone Idai that claimed over 1,000 lives and destroyed infrastructure in March.
The committee revealed that Mozambique’s international reserves remained at comfortable levels and were pegged at more than US$3 billion as of 19 April, enough to cover six months of imports of goods and services.
CM/jn/APA