The Mozambican central bank has reduced its benchmark lending rate by 100 basis points to 18 percent, Reuters reports.

The news agency says the monetary policy committee of the central bank has also decided to reduce its monetary policy interest rate to 16.5 percent from 18 percent.

In another report, AIM quotes the head of the central bank, Rogério Zandamela, as telling a press conference that the low rate of inflation justifies the reductions.

The Mozambican news agency says official figures indicate that the annual rate of inflation in the three biggest cities in Mozambique was 3.05 percent last month.