Mozambique: Commercial banks granted greater responsibility in managing foreign exchange operations

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Mozambique: Commercial banks granted greater responsibility in managing foreign exchange operations

1:43 CAT | 26 Feb 2018

O País

Commercial banks are to receive applications for the licensing of foreign exchange transactions instead of making requests directly to the central bank as previously, Director of the Regulation Department of the Bank of Mozambique, Paulo Bandane has revealed.

The director was speaking at a seminar publicising foreign exchange law innovations which brought together different players in the banking market and users of foreign exchange transactions,

The new Foreign Exchange Law rules and procedures were approved last year and are part of Notice 20 issued by the Bank of Mozambique.

Bandane explained that, in undefined cases, commercial banks should pass the requests to the central bank for processing. Commercial banks are authorised to open bank accounts in foreign currency, in the cases where a foreign or non-resident relationship is proven. They may also receive funds in the form of foreign direct investment.

“Banks have the duty to classify and record operations and report them to the Bank of Mozambique,” Bandane explained.

With regard to income from repatriated exports, there is no longer an obligation to immediately convert 50 percent to the national currency (metical) in order to give greater protection to the exporters and investors.

Under the new rules, a single currency hedge account has been created to allow conversions to take place as payment transactions become effective.

The central bank intends these measures to improve the business environment. “The delegation of greater powers to commercial banks and competency in the processing of foreign exchange shares will speed up operations,” Bandane concluded.

Friday’s seminar was the first of its kind and will be followed by seminars throughout the country publicising the new foreign exchange procedures and making processes more accessible to all market players.

By Minelda Maússe

Source: O País