Governor of Bank of Mozambique rejects revision of article in Foreign Exchange Law

4 November 2010

Maputo, Mozambique, 4 Nov – The governor of the Bank of Mozambique rejected the revision of an article in the proposal for regulation of the Foreign Exchange Law that establishes the requirement for automatic conversion of exporters’ revenues into meticals, the national currency, according to the Mozambican press.

During a meeting with representatives of Mozambique’s business sector, to which he was invited by the Mozambique-Brazil Chamber of Commerce, with the aim of promoting the most important aspects of the country’s new foreign exchange regime, Ernesto Gove said that, “in the current scenario, some of the anomalies, which within the former framework were not justified, are no longer relevant,” and noted that now, “there is political and macroeconomic stability.”

Number 3 of article 8 of the 11/2009 Law of 11 March is the controversial point that has been strongly criticised by the private sector.

Exporters do not want their revenues converted into national currency and consider that, “as the metical is not a currency used in international transactions and due to a lack of mitigating instruments, national companies will be exposed to exchange rate risk.”

The position of the Confederation of Economic Associations in relation to the proposed Foreign Exchange Law is clear and well-known: “We recommend the total suppression of this requirement of the Regulations, at least until a future date at which the metical is a stable and freely-traded currency.” (macauhub)