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Mozambique raises interest rate to curb inflation

Mozambique’s central bank raised its benchmark interest rates this week in bid to curb inflation in the African country, the bank said in a statement.

The Bank of Mozambique said on Monday its standing lending facility rate was increased by 100 basis points to 10.75 percent. Its benchmark interest rate for deposits was increased by 50 basis points to 4.25 percent, the central bank added.

“The committee noted the likely impact of the adverse international environment, as well as the expected effects of the drought in the southern and central regions of the country and floods in the northern region,” the bank stated.

Inflation in Mozambique rose to 11.3 percent in January compared with 10.6 percent in December, news agency Bloomberg said. The economy in the African nation expanded 5.6 percent in the fourth quarter of 2015 but it was below the government’s forecast.