Mozambique: Metical continues to depreciate against the US dollar

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Mozambique: Metical continues to depreciate against the US dollar

2:38 CAT | 08 Sep 2020

File photo: DW

The metical continues to depreciate against other currencies, falling to 72.42 and 71 meticais (sell and buy) to the US dollar according to the Bank of Mozambique exchange rate table last Thursday (03-09). The Euro cost 83.6 meticais (85.43 meticais, selling) and the Rand 4.22 and 4.3 meticais.

In percentage terms, the Bank of Mozambique’s ‘Economic Situation and Inflation Prospects Report‘ shows the metical depreciating by 1.89% against the dollar and by 6.65% against the Euro, but gaining value against the Rand by 0.24%. In annual terms, the Bank of Mozambique reports that the metical depreciated against the US dollar by 17.37%.

Although the Bank of Mozambique does not say so in the report, the metical’s continued slide against the U.S. dollar is known to results to a large extent from the weak productivity of the national economy, lately worsened by the pandemic, as a consequence of which the country is exporting less.

The Economic Outlook and Inflation Outlook Report shows that, in the second quarter, exports fell by US$531.14 million from US$ 2,242.38 million in the first quarter, to US$ 1,711.25 million in the second quarter. Meanwhile, imports have only fallen by US$99.25 million, from US$ 3,102.24 million registered from January to March, to US$3,002.99 million in the second quarter of 2020.

By Evaristo Chilingue