CTA criticises Bank of Mozambique for rising reserve requirement ratio in foreign currency

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CTA criticises Bank of Mozambique for rising reserve requirement ratio in foreign currency

1:54 CAT | 12 Mar 2019

File photo: Voa Portugues

The Confederation of Economic Associations of Mozambique (CTA) says that the decision of the Bank of Mozambique’s Monetary Policy Committee to raise the reserve requirement foreign currency ratio from its current 27 to 36 percent may have negative implications for the national economy.

According to Bernardo Cumaio, President of the Mozambican Business Confederation (CTA ) Monetary Policy Board, in addition to its implications for the reduction of foreign exchange, the measure may also contribute to a depreciation of the metical against the US dollar.

Speaking in Maputo on Monday at a press assessing the Monetary Policy Committee’s decisions, Cumaio said any rise in the foreign currency reserve requirement should be implemented gradually, so as to minimise the impact of the scarcity of the US dollar on national markets.

Furthermore, the CTA considers the 36 percent figure too high, and that it may cause irreversible shocks to the market.

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Source: Rádio Moçambique