Mozambique’s foreign reserves increasing

11 August 2017

Mozambique’s foreign reserves increased to US$2.446 billion on 9 August, an amount sufficient to cover 6.1 months of imports, excluding those associated to major projects, the Bank of Mozambique has announced.

The increase is due to the fact that although the central bank sold US$264 million in the interbank exchange market from 19 June to 9 August, used to pay for liquid fuel imports, it also purchased US$812.7 million, the statement released at the end of the Monetary Policy Committee meeting also indicates.

The central bank explained that provisional trade balance figures for the first quarter indicate substantial improvement, with exports up by US$673.2 million and “major projects for the external market, especially in the areas of aluminium production and mining, contributing with a larger percentage.”

During the same period imports rose in value by just US$20 million, the statement adds.

Banco de Moçambique cited the National Statistics Institute to assert that the indicators suggest an improvement of economic activity, with the economic climate index improving in June for the third straight month, reflecting rising optimism in the business community regarding demand and future employment.

The bank also notes that the significant correction of metical exchange rate appreciation in recent months, along with lower inflation, have helped stave off the decline in external competitiveness recently affecting the economy. (Macauhub)