Mozambique’s employers call for introduction of administrative currency exchange

19 November 2015

The Bank of Mozambique should introduce an administrative exchange to facilitate the purchase of foreign currency to finance imports of inputs and essential goods, said Wednesday the vice president of the Confederation of Economic Associations of Mozambique (CTA).

Rogério Samo Gudo said that the temporary measure could help address the current situation of continuing depreciation of the Mozambican currency against the dollar, losing 35.95 percent of its value and currently stands at 42 meticais to the dollar.

The appeal launched by the Mozambican employers’ association, according to Mozambican newspaper Notícias, came a few days after the Bank of Mozambique decided for the second consecutive month to increase benchmark interest rates, such as the marginal lending facility which was increased by 50 basis points to 8.25 percent.

The private sector also suggested the government should include specific transitional measures in the Economic and Social Plan and the State Budget for 2016 to encourage the productive sector, “in order to minimise the negative effects of the current economic climate.”

“In this context, the CTA encourages the government to consider reorientation of subsidies, focusing on production, as a transitional measure, and to consider the possibility of revising the contracts signed with the private sector for provision of goods and services that have a high import component, “said Gudo.

The vice president of the CTA also stressed that the recent increase in key interest rates by the Bank of Mozambique would have a negative impact on the private sector, worsening its debt to the banking system, which in the first half stood at 203.087 billion meticais (US$4.434 billion). (macauhub/MZ)