Mozambique raises benchmark rate to 14.25 pct

Mozambique’s central bank raised its key interest rate for a third time this year, as a weakening currency led to soaring inflation in the southern African nation.

The Monetary Policy Committee of the Bank of Mozambique increased the benchmark policy rate by 150 basis points to 14.25 percent, the institution said in a statement on its website on Monday. The interest rate on the standing deposit facility was also raised by 150 basis points to 7.25 percent.

The Monetary Policy Committee said in a statement that it was important to continue to implement a restrictive monetary policy, “taking into consideration the uncertainties and risks in the external and domestic environment, as well as inflationary pressures”.

“These considerations mean that the macroeconomic fundamentals set for the short- and medium-term remain constrained, making it necessary to introduce these adjustments,” the statement said.