Maputo — The Bank of Mozambique has decided to keep its key interest rates unchanged.
At its monthly meeting, held on Friday, the Bank’s Monetary Policy Committee concluded that in 2012 the main macro-economic indicators - notably the rate of inflation, economic growth, net international reserves and the money supply – had behaved well, and were “in line with the goals originally laid down for the year, despite an adverse international conjuncture”.
According to the consumer price indices for the three largest cities (Maputo, Beira and Nampula), the inflation figure for the year was 2.02 per cent, the lowest annual inflation figure since the introduction of structural adjustment measures in January 1987.
The average 12 monthly inflation rate over the year was 2.6 per cent, much lower than the government’s target of 5.6 per cent.
The Bank of Mozambique attributes low inflation to such factors as good performance by Mozambique agriculture, which increased the supply of basic foodstuffs, the fall in commodity prices on the world market, and the relative stability of the Mozambican currency against other currencies (notably the South African rand).
In December, the money supply expanded to 41.08 billion meticais (about 1.39 billion US dollars), which was an increase of seven per cent in the month, accounted for mostly by an increase of 2.63 billion meticais of notes and coins in circulation. The money supply at the end of the year was not much greater than the original target of 40.5 billion meticais.
Net international reserves increased in December by 103.5 million dollars, to reach a total of 2.656 billion dollars. This was 126 million dollars more than the target set for the end of the year. The gross international reserves recorded at the end of the year are sufficient to cover 5.8 months of imports of goods and services.
In December, the metical appreciated slightly against the dollar. On the last day of the year, the metical was quoted at 29.51 to the dollar on the Interbank Exchange Market, a monthly appreciation of 0.94 per cent. Taking the year as a whole, the metical depreciated by 8.73 per cent against the dollar, a contrast to the sharp appreciation of 17.33 per cent in 2011.
The metical slid by 5.42 per cent against the rand over the year. Most of this decline took place in December. On 31 December, the metical was quoted at 3.5 to the rand – a fall of 4.48 per cent during the month. In the first fortnight of January, this trend has been reversed with the metical once again appreciating against the rand.
The average interest rate charged on loans by the commercial banks in December was 21.49 per cent, a fall of 0.5 per cent on the November figure.
The prime rate granted to favoured clients was 15.46 per cent. The average interest rate granted by the banks to deposit accounts fell from 11.78 to 10.64 per cent.
The Monetary Policy Committee decided that the Bank will intervene in the interbank markets in order to reduce the money supply to 38.5 billion meticais by the end of January.
The Committee opted to keep the central bank’s own interest rates unchanged. Thus the Standing Lending Facility (the interest rate paid by the commercial banks to the central bank for money borrowed on the Interbank Money Market) remains at 9.5 per cent, while the Standing Deposit Facility (the rate paid by the central bank to the commercial banks on money they deposit with it) remains at 2.25 per cent. The Compulsory Reserves Coefficient - the amount of money that the commercial banks must deposit with the Bank of Mozambique - remains at eight per cent.