Forms of relationship between the Prime Rate of the Financial System (PRSF) of the market and the classification relative to the business environment in Mozambique

Abstract

The objective of this study is to investigate whether there is a direct link between the PRSF and the business environment classification in the country. The research adopts a qualitative and quantitative approach to explore the influence of the reference rate on commercial conditions. The results show that the reduction in PRSF in recent years indicates economic improvements and efforts by the Central Bank to make credit more accessible, stimulating consumption and investment. However, this reduction may also discourage savings and contribute to the formation of asset bubbles, requiring careful balance in rate management. Despite improvements in some indicators, Mozambique faces persistent challenges in the business environment, such as costly business registation and limited access to credit, which can limit the effectiveness of PRSF reduction in stimulating economic activity. The study emphasizes that continuous improvement of the business environment in Mozambique requires a holistic approach, involving monetary policies and structural reforms. Coordinating initiatives to reduce bureaucracy, improve process efficiency, and facilitate credit access is crucial to making the country more attractive and competitive for entrepreneurs and investors. Overcoming these challenges will contribute to driving sustainable economic development in Mozambique.