The Bank of Mozambique kept its MIMO policy rate unchanged at 9.25% at its July 2026 meeting, holding borrowing costs at their lowest level since December 2015 for a third consecutive meeting. Headline inflation rose to 7.5% in June from 7.2% in May and is expected to remain elevated in the near term—driven largely by higher global energy prices—before easing over the medium term.
At the same time, economic activity is expected to soften. Growth excluding natural gas is estimated at 1.1% in the first quarter, down sharply from 4.8% in the previous quarter, while output including natural gas is projected to contract by 0.1%.
Policymakers pointed to heightened uncertainty around the duration of the conflict in the Middle East and its potential impact on supply chains, as well as on international and domestic fuel and food prices. They stressed that future policy decisions will be guided by the evolution of risks and uncertainties surrounding the inflation outlook.
