Nyusi urges Central Bank to be “innovative and daring” – Watch

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Nyusi urges Central Bank to be “innovative and daring” – Watch

8:35 CAT | 02 Sep 2016

TVM

Mozambican President Filipe Nyusi on Thursday urged the Bank of Mozambique to adopt “innovative and daring” measures to rationalise the country’s international reserves in order to cover imports and to pay the service on the foreign debt, as well as ensure greater exchange stability.

Nyusi launched this challenge at the ceremony where he swore into office the new governor of the central bank, Rogerio Zandamela.

The President wanted to see the bank guided by a mechanism that would allow a great capacity of macro-economic adjustment, particularly in a situation where the economy suffers severely from external shocks.

The bank “should resort to policies of financial resilience, capable of maintaining economic stability even in situations of cyclical macro-economic crises”, he urged.

Nyusi said that among the major macro-economic challenges facing the Bank are control over the money supply, control of the international reserves, control of interest rates, and expanding financial services throughout the country.

The access to financial services by the majority of the population, added the President, is still a central concern of the government in its efforts to promote local development. Exploiting the economic potential existing in rural districts demanded that banks should operate there.

Yet Mozambique’s commercial banks still operate overwhelmingly in the major cities, and the majority of the country’s districts have no banks at all.

Nyusi called for relaxing the conditions demanded for opening bank branches in rural areas, “and the adoption of innovative initiatives that allow gains and efficiency in making financial products and services available where they are necessary”.

He stressed that the current wave of price rises (inflation is now running at around 20 per cent a year), and the sharp depreciation of the national currency, the metical, “imposes an enormous challenge in conducting an exchange policy that guarantees the stability of the financial system”.

The appointment of Zandamela as the new governor, said Nyusi, was intended to create “new impetus and dynamism” in the functioning of the central bank so that it can respond efficiently and effectively to the goal of promoting the well-being of the people.