Mozambique: ‘Very high’ internal public debt presents ‘risks’ – central bank

Login

Register

http://www.clubofmozambique.com/

Mozambique: ‘Very high’ internal public debt presents ‘risks’ – central bank

8:20 CAT | 13 Dec 2018

In file CoM

The volume of Mozambique public debt held by domestic creditors remains at very high levels and there are risks associated with its sustainability, the Bank of Mozambique said on Thursday in a statement released after a meeting of its monetary policy committee.

“Internal public debt remains high,” says the statement, explaining that figures for November show that “the flow of internal public debt contracted with recourse to Treasury bills, Treasury bonds and advances from the Bank of Mozambique had increased since the last committee meeting on 22 October.

The increase was of the order of 3.759 billion meticais (€53 million), for a total of just over 112 billion meticais, that is “the equivalent of 12.8% of GDP”, it states.

These amounts “do not take into account amounts of other internal public debt, such as mutual contracts and leasing, as well as responsibilities in arrears,” it adds.

The focus on internal public debt comes in the final communiqué of the day’s meeting, at which the committee decided to reduce the monetary policy interest (MIMO) rate by 75 basis points to 14.25%.

The decision is justified by “the current conditions of the Mozambican economy, which favour projections of low and stable inflation, of around one digit, in the short and medium term”, it states, adding that “even so” there are “risks associated with the sustainability of public debt, as well as uncertainties about the evolution of prices.”

Source: Lusa