Mozambique’s domestic public debt grows by US$63 million in two and a half months

1 November 2019

Mozambique’s domestic public debt contracted through Treasury Bills, Treasury Bonds and Bank of Mozambique advances has increased to 140.610 billion meticais (US$2.217 billion) since 14 August, the Bank of Mozambique said in a market statement on Thursday.

The central bank statement, which is intended to account for decisions taken at the meeting of the Monetary Policy Commission (CPM) meeting held in the city of Xai-Xai, said that since that date, when the previous CPM meeting was held, domestic public debt had increased by about 4 billion meticais following the issuance of Treasury Bills.

The Bank of Mozambique warned that the amounts mentioned do not take into account other domestic public debt figures, such as loan and lease agreements, as well as defaulting liabilities.

The CPM members decided to keep the MIMO monetary policy interest rate at 12.75%, as well as the Permanent Deposit Facility and Permanent Lending Facility rates at 9.75% and 15.75%, respectively, and the Required Reserve rates for domestic and foreign currency liabilities at 13.00% and 36.00%, respectively.

The statement issued at the end of the meeting said the decision to keep the MIMO rate unchanged was based on fears that the recent worsening of internal and external risks could in the medium term reverse the current low and stable inflation profile.

The most prominent risks in this assessment are, at a domestic level, the worsening of military instability in the northern and central areas of the country and the occurrence of climate shocks and, externally, increased commercial and geopolitical tension. (Macauhub)