Further tightening by the Bank of Mozambique would hinder future growth and have "negative knock-on effects" on the private sector, a report published by the World Bank has said.

The report said a "robust" policy response was "vital" to manage short-term pressures across the economy. Much like other resource-rich countries, Mozambique faces the challenges of low commodity prices and weak demand among trading partners.

It is also grappling with regional drought, which has resulted in rising