The Bank of Mozambique (BoM) surprised markets by delivering another outsized 200bp rate hike, taking its benchmark MIMO rate to 17.25 percent.
This is the most restrictive monetary policy has been since early 2018. The BoM is one of just four African central banks to have raised rates by 400bp or more this year. Since the lows in 2020, policymakers have hiked rates by a combined 700bp. The central bank said in its statement that the decision to deliver another outsized rate hike is to ensure the return of inflation to single-digit territory in the medium term, against a backdrop of expected ongoing volatility of energy prices in the global market, amid the prolonged Russia-Ukraine conflict.
