The conditions set by the International Monetary Fund (IMF) to resume financial aid to Mozambique are negative for its sovereign debt rating, Moody’s said Wednesday.
The agency recalled that the IMF announced at the end of the visit by its technical mission that Mozambique will need to meet several steps before talks for disbursement of the US$283 million loan agreed in December 2015 can be resumed.
“These conditions are negative for the assessment of the risk related to Mozambique’s sovereign debt because their effect is that other international donors in the so-called Group of 14 are waiting for them to be met,” Moody’s said.
The conditions outlined by the IMF to return to talks with a view to resuming financial aid include more progress in the effective implementation not only of macroeconomic adjustment measures, but also increased transparency, improved governance and ensuring accountability.”
Since July 2014 Mozambique’s economic indicators have revealed the seriousness of the situation, noted Moody’s, pointing to the depreciation of the metical against the dollar by 43 percent until last April, an inflation rate to rise to 17.3 percent compared to 2 percent a year earlier and foreign reserves decreasing from US$3.2 billion to just US$2 billion. (macauhub/MZ)