Angola and Mozambique enter 2017 in the top ten most devalued currencies

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Angola and Mozambique enter 2017 in the top ten most devalued currencies

9:38 CAT | 03 Jan 2017

The national currencies of Angola and Mozambique are among the ten currencies that depreciated the most last year, with the kwanza falling almost 20 percent and the metical losing more than 30 percent in 2016, the Lusa news agency reports.

The currencies of the largest Portuguese-speaking countries in Africa are among the ten worst-performing in the world for 2016. Mozambique’s metical, which depreciated by 33.2 percent, was surpassed only by the currencies of Nigeria, Venezuela, Suriname and Egypt.

Angola, whose kwanza has devalued 18.9 percent during the last twelve months, performed slightly better than Mozambique, and was ahead of Mongolia, Congo and Sierra Leone.

Angola and Mozambique face a significant economic slowdown due to falling commodity prices, particularly oil, and slowing global growth.

The International Monetary Fund (IMF) and state budget donors suspended aid to Mozambique in April last year following the revelation of government-guaranteed loans amounting to more than US$1.4 billion (EUR1.2 billion) incurred over 2013 and 2014, on top of the already known about debts of the Mozambican Tuna Company (Ematum) contracted under similar circumstances.

On October 25, the Mozambican government acknowledged its inability to make forthcoming repayments and asked creditors for a restructuring of payments, a condition indispensable for a new IMF program since the funds rules prevent it granting aid to countries with an unsustainable debt trajectory.

The collapse in the international oil price saw Angola’s fiscal revenue cut by half in 2015. Inflows of foreign currency aggravated the cost of imports and access to products, including food, whose prices rocketed.

The IMF expects Angola to see growth of 1.5 percent this year, while the forecast for Mozambique is 5.5 percent.

Source: Lusa