Maputo — The Bank of Mozambique has decided to hold its key interest rates unchanged.
At its monthly meeting, held on Monday, the Bank’s Monetary Policy Committee announced that 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.
The Committee also decided that the central bank will intervene in the inter-bank markets in order to ensure that the money supply does not exceed 37.163 billion meticais (about 1.24 billion US dollars) by the end of February.
The money supply contracted by about 2.6 billion meticais in January, falling to 38.465 billion meticais by the end of the month. This was slightly lower than the target set by the bank of 38.5 billion meticais.
The Monetary Policy Committee noted that the inflation rate in January, according to the National Statistics Institute (INE), was 1.35 per cent, which has pushed up the annual inflation rate to 2.73 per cent. The average 12 monthly inflation rate over the past year, however, has continued to fall and now stands at 2.41 per cent (the figure at the end of December was 2.6 per cent).
The country’s net international reserves fell by 187.7 million US dollars in January, and stood at 2.418 billion dollars at the end of the month. The decline was due largely to the sale of over 131 million dollars by the central bank on the inter-bank exchange market, and to net transfers of the banks of 59.7 million dollars.
The metical continued to depreciate slowly against the dollar. At the end of January it was quoted at 29.98 to the dollar on the Inter-bank Exchange Market.
This was a depreciation of 1.58 per cent in January. Over the past year, the metical depreciated by 10.6 per cent against the dollar.
Against the South African rand, the currency of Mozambique’s main trading partner, the movement was in the opposite direction. At the end of January there were 3.36 meticais to the rand – the metical had appreciated by 3.17 per cent against the rand over the month. From February 2012 to January 2013, however, the metical depreciated by 4.18 per cent against the rand.
Interest rates charged by the commercial banks are gradually falling. The statement from the Monetary Policy Committee noted that the average interest rate in December charged by the banks on loans with a maturity rate of a year was 21.38 per cent, a decline of 11 base points over the previous month’s figure. There was a similar decline in the average interest offered by banks on deposit accounts, which by the end of the year had fallen to 10.53 per cent.