Mozambique's central bank maintained its benchmark standing facility rate at 8.25 percent and will intervene in markets to maintain the monetary base at 46.451 billion meticais in April, continuing what it described as "a prudent monetary policy" in an environment characterized by uncertainty about global economic growth along with domestic and international risks.
The April target for Mozambique's monetary base is up 4 percent from the Bank of Mozambique's March target of 44.657 billion meticais and the February target of 44.994 billion. In 2013 the central bank cut cut its policy rate by 125 basis points.
Inflation in Mozambique rose to 3.0 percent in March from 2.38 percent in February due to the impact of floods at the beginning of the year, the depreciation of the medical against the U.S. dollar and the South African rand and a general acceleration of prices in South Africa.
After depreciating from mid-January through February, the metical has firmed slightly, but was still down 4 percent this year against the U.S. dollar, trading at 31.25 today.
Provisional data showed that Mozambique's economy expanded by 7.0 percent in 2013, in line with the central bank's forecast, down from 7.3 percent in 2012, helped by an expansion of the services sector, which grew by 8.97 percent, the bank said. Mining, construction, transport and communications also grew last year.
The International Monetary Fund has forecast growth in Mozambique's economy of 8.3 percent this year along with 5.6 percent inflation.
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