Insufficient production puts pressure on foreign currency market, governor of Bank of Mozambique warns

16 September 2010

Maputo, Mozambique, 16 Sept – Mozambique continues to produce less than it consumes and imports exceed exports thus leading to permanent pressure on the domestic foreign currency market, the governor of the Bank of Mozambique warned Wednesday in Maputo.

Before the start of the session of the of the Coordinating Commission of the National Payment System (CCSNP), a consulting body of the governor of the Bank of Mozambique, Ernesto Gove said that the exchange rate development of the metical and the Consumer Price Index (CPI) showed anomalies on the overall behaviour of the Mozambican economy.

“In a market economy environment, sudden variations or a great magnitude and with a trend for raising exchange rates, their spreads and inflation, are unequivocal signs of an economy who’s state of health requires appropriate intervention,” he said.

According to the governor, in a climate characterised by structural deficits in the balance of payments and the General State Budget, strictness, financial discipline and austerity were the fundamental pillars for macroeconomic management.

Also in this respect, Gove said that “the challenge that arises is to follow up on these objectives without losing sight of the unavoidable social side of the economy, which requires appropriate policies to meet the needs of the extremely vulnerable strata (of society).”

The CCSNP, whose members were appointed Wednesday, is made up of representatives of the Bank of Mozambique, the Finance Ministry, the National Communications Institute of Mozambique, the Mozambique Stock Exchange, the Mozambican Association of banks, retail banks and payment services companies. (macauhub)