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Mozambique central bank maintains key rate for second straight meeting

BY Reuters | ECONOMIC | 10:34 AM EDT

MAPUTO, May 25 (Reuters) - Mozambique's central bank left its main interest rate unchanged at 9.25% on Monday.

Governor Rogerio Zandamela told a press conference that the decision reflected high levels of uncertainty over the length of the Iran war and its impact on supply chains and prices of fuel and food.

In March the Bank of Mozambique paused an easing cycle that stretched back to January 2024 as the U.S.-Israel war against Iran compounded domestic challenges including the Southern African country's heavy debt burden.

Annual inflation accelerated to 4.41% in April, up from 3.37% in March.

(Reporting by Manuel Mucari; Additional reporting by Custodio Cossa; Writing by Sfundo Parakozov; Editing by Alexander Winning)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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