Bank of Mozambique to adopt additional measures to mitigate effects of Covid-19

23 March 2020

The Bank of Mozambique decided to introduce additional measures to enhance liquidity in foreign and national currency, including a credit line in the amount of US$500 million to mitigate the macroeconomic impacts of the new coronavirus, according to a statement released on Sunday in Maputo.

The statement signed by the governor of the central bank, Rogério Zandamela, focuses on the introduction of lines of credit in foreign currency to the banks and relaxation of conditions for restructuring debts of bank customers to mitigate the effects of Covid-19.

In addition to the credit line in US dollars, the Mozambican central bank decided to authorise the establishment of additional provisions by credit institutions and financial corporations in cases of renegotiation of the terms and conditions of loans, before its expiration, for customers affected by the Covid-19 pandemic, with effect from 23 March until 31 December 2020.

The statement added that these measures reinforce the decisions previously taken and aim to provide liquidity in foreign currency and national currency to support businesses and families in honouring their commitments, following the worsening of the risk to the macro-economic impacts of Covid-19.

It concluded by stating that the Bank of Mozambique will continue to monitor the evolution of economic and financial indicators and the macro-economic impacts of Covid-19 and take additional corrective measures whenever necessary.

Last week the Mozambican central bank decided to reduce the reserve ratio  from 13% to 11.5% in local currency and from 36% to 34.5% in foreign currency, with effect from 7 April next.

The decision taken by the Board of Directors of the Bank of Mozambique is intended, according to the statement, to give the banking system liquidity to cope, in a more resistant way, to the growing risks arising from the macro-economic impacts of Covid-19. (macauhub)