Mozambique requires conversion of bank accounts in dollars to local currency

7 December 2015

Bank accounts denominated in dollars in Mozambique will be automatically converted into meticais when they are used for any transaction, Portuguese weekly newspaper Expresso reported at the weekend.

Any transaction includes, for example, payment of salaries, which affects foreign companies operating in the country and the temporarily transferred staff who will no longer be paid in dollars.

This measure is intended to increase demand for the Mozambican currency its recovery as the dollar and other foreign currencies, such as the South African rand and the euro, are replaced in the market.

Last week the government of Mozambique, in a cabinet meeting approved some exchange control measures, but the cabinet spokesman said only that the package included the provision of foreign exchange “exceptionally” to import basic goods and an increase of foreign exchange intervention to ensure greater availability of foreign currency.

The spokesman said that public companies would be instructed to contribute to the replacement the dollar with the metical in the economy, as part of implementation of the foreign exchange law.

Previously, the Bank of Mozambique had announced the introduction of limits on the use of debit and credit cards abroad to avoid outflows of foreign currency.

The governor of the Bank of Mozambique said transactions using credit and debit cards abroad had increased from US$300 million in 2012 to US$800 million in 2014 and referred to the “exceptional situation” that the Mozambican economy is going through, “which requires a change of consumption habits and the import model.” (macauhub/MZ)