MAPUTO (Reuters) -Mozambique’s central bank cut its benchmark interest rate by 75 basis points to 10.25% on Thursday, saying it expects inflation to remain in single digits over the medium term.
The Bank of Mozambique has now lowered the MIMO lending rate for 10 policy meetings in a row in an easing cycle stretching back to January 2024.
Its latest statement highlighted debt pressures but said the inflation outlook was helped by favourable international commodity prices.
The last rate cut, which came in May, was also of 75 basis points.
Annual inflation in the resource-rich Southern African country edged up to 4.15% in June from 4.00% in May.
Local politics remains a potential risk following a disputed election last year.
The opposition and Western observers say the long-ruling Frelimo party won the vote through rigging, which Frelimo denies.
Mozambique is seeking to prosecute the country’s main opposition leader, Venancio Mondlane, for allegedly inciting civil unrest following the election in which more than 300 people were killed, many of them in clashes with security forces.
(Reporting by Custodio Cossa and Manuel Mucari; Writing by Sfundo Parakozov; Editing by Alexander Winning and Hugh Lawson)
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