Mozambique’s central bank has reduced its benchmark lending rate to its lowest level since December 2020, despite ongoing post-election unrest that has disrupted the nation’s economy.
The Banco de Moçambique announced a 75 basis point cut to its Mimo rate, bringing it down to 12.75%. This marks the sixth consecutive rate reduction this year. Governor Rogerio Zandamela stated that the decision was based on the continued stabilization of single-digit inflation projections in the medium term, even as uncertainties persist due to post-election tensions and their impact on prices.
Since disputed elections on October 9, unrest has gripped the country. Opposition candidate Venâncio Mondlane rejected the election results, which extended the ruling party’s nearly five-decade dominance, calling for protests. The turmoil has resulted in border closures, suspended port operations, and significant trade disruptions, with businesses losing multiple days of activity.
Annual inflation rose slightly to 2.7% in October, and the unrest could exacerbate price pressures. Mozambique’s economy has also shown signs of slowing, with third-quarter growth falling to 3.7%, compared to 4.5% in the previous quarter, according to the national statistics institute.