Mozambique’s banking system is in good health, says head of central bank

12 October 2007

Maputo, Mozambique, 12 Oct – The Mozambican banking system “exudes health and is financially solid,” the chairman of the Bank of Mozambique, Valdemar de Sousa, said Thursday in in Maputo.

Cited by Mozambican newspaper Notícias, de Sousa said that despite external shocks, economic credit had been growing year by year and solvency ratios and bad debt levels had improved, as compared with previous years.

In relation to interest rate performance in Mozambique’s monetary markets, de Sousa said these were likely to slowdown.

In June, the Bank of Mozambique reduced its interbank interest rates to 15.5 percent per year, as compared to 17.5 percent previously.

“For the institutions that place their liquidity with the Bank of Mozambique, this rate was reduced from 15 to 10.5 percent per year and, immediately, other products on the interbanking market reacted in the same way,” he said.

Meanwhile, the 12-month interest rate on savings rose, in comparison with December, “and that is a positive fact, as it means that for savers, their savings placed in the banking system are seeing positive growth and, when compared to average or annual inflation, they have been seeing positive real rates.”

According to de Sousa, the economy, “is developing within our projections at the beginning of the year and there is still a comfortable amount of room for expansion of credit.” (macauhub)