The new governor of the Bank of Mozambique (BdM), Rogerio Zandamela, on Friday night pushed up interest rates by 6% and imposed further restrictions on commercial banks. He said that with inflation now over 25%, the interest rate was effectively negative in real terms. Zandamela predicted that inflation will exceed 30% by the end of the year.
The base rate, the rate at which BdM lends to commercial banks (taxas de juro das Facilidades Permanentes de Cedencia de Liquidez - FPC), was raised to 23.25%, and the interest rate paid on compulsory deposits with BdM (taxas de juro das Facilidades Permanentes de Cedencia de Depositos - FPD) was raised to 16.25%. In addition, the commercial banks must deposit with the BdM 15.5% of their deposits (up from 13% for Meticais and 15% for foreign currency deposits). This is partly to mop up what Zandamela said was an excess of liquidity in the commercial banks of $60 million.
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