The Bank of Mozambique has cut its benchmark interest rate to 9.25 per cent from 9.50 per cent, continuing its easing cycle as inflation remains subdued, the central bank said in a statement on Wednesday, January 28, 2026.
The decision was anchored on expectations that inflation will stay within single-digit levels over the medium term, despite lingering risks and uncertainties. These include the impact of flooding as well as escalating global trade and geopolitical tensions, which could affect inflation forecasts.
Data from the central bank showed that annual inflation slowed to 3.2 per cent in December from 4.4 per cent in November. The decline was supported by a stable national currency and relatively steady international prices.
On economic activity, the bank noted that gross domestic product excluding liquefied natural gas (LNG) production contracted by 1.3 per cent, following a 1.7 per cent decline in the second quarter. This highlights continued weakness in the non-LNG segment of the economy.
Despite the contraction, the central bank said it expects a gradual recovery in the non-LNG economy, although growth is likely to remain moderate due to the lingering effects of climate-related shocks.
The latest reduction marks the 13th consecutive interest rate cut since January 2024, when the benchmark rate stood at 16.50 per cent. In November 2025, the Monetary Policy Committee had reduced the rate to 9.50 per cent.
The central bank reiterated its commitment to supporting economic recovery while maintaining price stability amid a challenging domestic and global environment.
