Mozambique: AfDB provides $27 million grant for improved sanitation services in Chimoio
Mozambique continues to show a reduction of net international reserves (foreign currency reserves), reducing the country’s ability to respond to external shocks and challenging its economic relations with foreign countries, especially its ability to pay debts and import goods.
Preliminary information published by the Bank of Mozambqiue points to a fall of US$29.2 million in July. The bank says that foreign currency reserves fell by US$19.3 million to US$1.9016 billion in the first half of last month alone.
According to the document, the situation reflects net Bank of Mozambique sales of US$9.6 million to commercial banks, US$7.9 million in external debt service and miscellaneous state payments of US$6.7 million.
In the first half of July, the fall in foreign reserves was mitigated by net foreign exchange gains amounting to US$6.8 million, an entry of US$24.1 million to the state and interests from assets abroad worth US$1.3 million.
In the second half of July, external reserves fell by US$9.9 million to a balance of US$1.8405 billion, primarily reflecting the repayment of foreign debt in the amount of US$23.9 million dollars and net sales of US$13.2 million by the Bank of Mozambique to commercial banks. Net foreign exchange gains of US$ 9.1 million and foreign direct investment worth US$ 8.7 million were recorded during the same period,.
The decline in international net reserves comes at a time when the economy is struggling with shortages of foreign exchange, which limits the purchase of imports in a context of high dependence on external markets. Mozambique’s external reserves are usually expected to cover about 3.5 months of imports.
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