The Bank of Mozambique kept its main policy rate unchanged at 9.25% in March 2026, maintaining it at the lowest level since December 2015 and temporarily halting the monetary easing cycle that began in 2024. The decision reflects mounting external concerns over inflation expectations, driven by the conflict in the Middle East, as well as domestic uncertainty surrounding production and supply chains after flood-related damage earlier in the year. Headline inflation climbed to 3.2% in February, up from a little over a one-year low of 3.04% in January. The economy grew by 4.7% in the final quarter of 2025, rebounding from a 0.9% contraction and signaling an improvement in economic performance. Nonetheless, growth expectations have softened, with activity projected to rise only slowly and gradually. At the same time, domestic public debt continues to deteriorate, weighing on financial markets, as persistent delays by the State in servicing domestic public debt undermine demand for government bonds and contribute to rigidity in interbank rates.