Mozambique Central Bank cuts key rate by 75bps

Mozambique, a country in southeastern Africa, has been making headlines with the Central Bank's recent decision to cut interest rates by 75 basis points. This move comes as part of a series of rate cuts, with expectations for further reductions in the future. In a recent interview on CNBC Africa, Celio Hamide, Head of Sales and Global Markets at Standard Bank in Mozambique, provided insights into the implications of the rate cut and the country's economic outlook. While Mozambique takes bold steps to stimulate growth, neighboring South Africa has chosen to maintain its interest rates, showcasing the diverging paths of monetary policy in the region. Hamide highlighted the stability of the exchange rate and the possibility of additional rate cuts in the coming months. Despite challenges in key sectors like agriculture and manufacturing, Mozambique remains optimistic about growth prospects, especially with the potential influx of capital from large-scale projects in sectors like mining and liquefied natural gas (LNG). The upcoming elections in Mozambique and the impact of global market trends on the local currency are also factors to watch. Overall, the rate cut signifies a proactive approach by the Central Bank to support economic activity and position Mozambique for sustainable growth in the future.