Mozambique’s Central bank on Wednesday reduced its main interest rate by 25 basis points to 9.25 percent, marking a second consecutive cut following a similar decision in November 2025. The move comes as annual inflation slowed to 3.23 percent in December, down from 4.38 percent in November, its lowest level in 13 months.
However, analysts warn that inflation could rebound due to factors such as monetary financing of the budget deficit, the resumption of major liquefied natural gas projects and a possible devaluation of the metical.
Recent severe floods, which have caused infrastructure damage estimated at $644 million, could also exert upward pressure on prices.