In a continued effort to sustain monetary easing amid a favourable macroeconomic environment, the Bank of Mozambique has once again lowered its benchmark interest rate—bringing the MIMO rate down from 11.75% to 11.00%. The move, announced on Friday, marks the ninth consecutive reduction by the central bank as it navigates a period of moderating inflation and improving fiscal conditions.
The decision by the Monetary Policy Committee reflects a prudent approach to anchoring inflation expectations while maintaining macroeconomic stability. This latest cut situates the MIMO rate—the Monetary Policy Interest Rate used as the central instrument for monetary policy—at its lowest level since 2021.
Mozambique has recently experienced a steady deceleration in consumer price inflation, supported by favourable agricultural output and stable fuel import costs. According to official statistics from the Instituto Nacional de EstatÃstica, headline inflation has been trending downward, with year-on-year inflation falling to 6.8% in April 2025, compared to 9.4% in the same period last year.
The Bank of Mozambique (Banco de Moçambique) noted that the domestic economic outlook has improved in line with global disinflation trends and modest growth recovery in Sub-Saharan Africa. Nevertheless, the central bank maintains a cautious tone, highlighting persistent risks such as external debt vulnerabilities, potential climate shocks, and geopolitical tensions that could impact commodity flows.
Monetary policy easing in Mozambique aligns with a broader pattern observed in several African economies where central banks are beginning to loosen restrictive stances imposed during the post-pandemic inflationary cycle. In a regional context, countries like Zambia and Ghana have also taken steps to recalibrate their interest rate regimes in response to easing inflation.
The Mozambican metical has remained relatively stable against major currencies in 2025, providing the central bank with greater latitude to pursue accommodative monetary policy without exerting downward pressure on the exchange rate. Furthermore, the central bank’s FX reserves have remained at healthy levels, buttressing its monetary policy credibility.
Although the sustained rate cuts have been well received by the private sector—particularly within the banking and construction industries—economists caution that continued rate reductions must be carefully weighed against potential overheating risks in consumer credit markets.
With the central bank signalling that future policy adjustments will remain data-dependent, attention will now turn to forthcoming inflation data and external financing conditions to determine whether this easing cycle will persist.
The full statement from the Monetary Policy Committee can be accessed via the Bank of Mozambique’s official website.
