Mozambique’s domestic public debt falls slightly since the end of October

16 December 2019

Mozambique’s domestic public debt has decreased slightly since the end of October, reflecting the pay down of Treasury Bonds by approximately 567 million meticais, said the Monetary Policy Commission of the Bank of Mozambique, which last week held its last meeting in 2019.

The statement issued reported that domestic public debt, contracted through Treasury Bills, Treasury Bonds and advances from the Bank of Mozambique, dropped from 140.610 billion to 140.073 billion meticais (US$1.96 billion).

The central bank pointed out, however, that the amounts do not take into account other values of domestic public debt, such as mutual and leasing contracts, as well as liabilities in arrears.

The Monetary Policy Commission said the country’s international reserves were at “comfortable” levels, at US$3.661 billion in the first week of December, which is enough to cover more than 6 months of imports, excluding major projects.

The statement added that forecasts of recovery of the economy in 2020 were unchanged, but still well below the country’s potential, bolstered by the reconstruction after the cyclones, payment by the State of debts to suppliers of goods and services and implementation of projects related to natural gas exploration.

The risks to the economic development of Mozambique internally are related with increased military instability in the north and centre of the country and the increasing probability of exogenous climate shocks, commercial and geopolitical tension, which has negative implications for global trade and the prices of goods.

The commission’s meeting decided to keep the monetary policy interest rate (MIMO) at 12.75%, as well as the Deposit Facility and the Marginal Lending Facility, at 9.75% and 15.75%, respectively, and the coefficients of compulsory reserves for liabilities in national currency and in foreign currency at 13.0% and 36.0%, respectively. (macauhub)