Mozambique’s currency sees sharp devaluation against the dollar

29 July 2015

The currency of Mozambique, the metical, in recent months has suffered a sharp devaluation due to the strengthening of the dollar and the current account deficit of the balance of payments, said Tuesday the spokesman and director of the Bank of Mozambique.

Valdemar de Sousa, who was speaking in Maputo about the report produced by the bank entitled, “Economic Situation and Inflation Prospects,” said that the devaluation of the metical against the dollar observed since the last quarter of 2014, with the dollar at 39.03 meticais at the end of June 2015, represented a cumulative and annual depreciation of the metical of 23.55 percent and 27.34 percent, respectively.

The spokesman for the Bank of Mozambique said the Mozambican currency had also recorded losses against the euro and the South African rand, with annual depreciation of 4.5 percent and 11.07 percent, respectively, according to Portuguese news agency Lusa.

Sousa also said Mozambique’s Gross Domestic Product (GDP) grew 5.9 percent in the first quarter, confirming a figure that had already been released last week by the National Statistics Institute (INE).

At the end of June Mozambique had net international reserves totalling US$2.6 billion, Sousa said.

At the same meeting, the director of the Bank of Mozambique described the recent downward revision of Mozambique’s credit rating “B-” by Standard & Poor’s as an “anticipation of expectations” and added that “there is no delay in debt payment to any creditor.”

Standard & Poor’s said its decision was based on the assumption that the government’s announcement about restructuring of the loan taken on by tuna company Ematum was a debt that signalled the imminent bankruptcy of the company.(macauhub/MZ)