An intervention by the Bank of Mozambique allowed a “slowdown in depreciation” of the metical against the dollar in early July, when the Mozambican currency recorded an average annual depreciation of over 27 percent, the Bank of Mozambique said Monday.
The Mozambican central bank said that in June, the dollar was quoted at an average of 39.03 meticais on the interbank foreign exchange market, a figure that dropped to about 37 meticais after its intervention, according to a statement from the central bank’s Monetary Policy Committee.
At commercial banks, the average exchange rate against the dollar is now 38.5 meticais, compared to 39.96 meticais last month, while at bureau de change the rate is 39 meticais, against an average of 39.35 meticais offered earlier, the document said.
The sharp depreciation of the metical has been linked to a combination of internal factors such as the political situation, a decrease in the value of exports and the reduction of foreign direct investment flows, and external factors, namely the appreciation of the dollar and the overall decline in the prices of products on international markets.
Despite the depreciation of the Mozambican currency, the central bank said the balance of gross international reserves increased by US$146 million in June to US$2.6 billion, representing a surplus of US$50 million compared to the target set, and is now enough to cover 3.85 months of imports of goods and services.
In this context, the Bank of Mozambique’s Monetary Policy Committee will intervene later this month in the interbank market to “ensure compliance with the monetary base target for July 2015, set at 60.075 billion meticais” (about US$1.564 billion).
The central bank also plans to keep benchmark interest rates unchanged, at 7.5 percent for the marginal lending facility and 1.50 percent for the deposit facility, with the compulsory reserve rate at 8 percent. (macauhub/MZ)