The Central Bank of Mozambique cut its key MIMO interest rate by another 75 bps to 10.25% on July 31, 2025, marking the tenth consecutive rate reduction. Policymakers said the decision reflects the continued anchoring of inflation expectations at single digits over the medium term, helped by a stable exchange rate and favourable trends in international prices of goods. The headline inflation edged up to 4.2% in June from 4% in May. Meanwhile, the central bank noted that the risks and uncertainties surrounding inflation projections remain high. Key factors likely to drive inflation upward in the medium term include the worsening fiscal situation - amid growing challenges in mobilizing financial resources for the State Budget - uncertainty about the pace of recovery in productive capacity and the supply of goods and services, and the impact of climate-related shocks.