Bank of Mozambique revokes limits on use of bank cards abroad

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Bank of Mozambique revokes limits on use of bank cards abroad

10:21 CAT | 14 Feb 2017

A Verdade / Rogério Zandamela, CenBank governor

The Bank of Mozambique has cancelled the annual limit of 700,000 meticais (EUR9,000) on bank card payments outside the country, central bank governor Rogério Zandamela. announced yesterday.

“The limit will not be extended,” Zandamela told a press conference called to announce the decisions of the Monetary Policy Committee meeting in Maputo yesterday.

Zandamela, who took over the leadership of Banco de Moçambique last year from Ernesto Gove, said the annual limit for payments abroad was aimed at stabilizing the economy in a situation different to the current one, and that it no longer made sense to keep the measure.

“The measure was meant to protect the net reserves of the Bank of Mozambique, whereas today we are in a situation where expectations have stabilized,” Zandamela said, noting that the country’s main economic indicators are showing “some improvement”. Inflation is forecast to fall in 2017, and gross domestic product to recover in the first two quarters of 2017.

At the time the decision was taken, the central bank said the measure, adopted at the end of December 2015, was needed to stop abusive and excessive use of international credit cards in commercial transactions responsible for capital flight and other financial crimes.

With the measure now repealed, cases requiring the establishment of an exceptional limit need to be substantiated by the issuing entities and submitted to the decision of the Bank of Mozambique.

“The Bank of Mozambique will no longer interfere in citizens’ decisions,” said the governor, noting, however, that this was not to usher in anarchy, but that “knowing each client’s account limit will no longer be the Bank of Mozambique’s responsibility”.

In addition to this repeal, the Monetary Policy Committee decided to adopt, from April 15, a new monetary policy benchmark interest rate, which will become the main intervention rate of the Bank of Mozambique in the interbank markets.

“The interest rate on the marginal lending facility and the deposit facility will continue; we are not going to scrap them. But now they will coexist with the new monetary policy benchmark interest rate,” the governor explained, noting that all other fees will be calculated according to this new rate.

“Banks are going to negotiate liquidity-providing (outright purchase) or liquidity-absorbing (outright sale) at this rate,” added Zandamela, saying that all these changes are aimed at accelerating the stabilization of the Mozambican economy and that what has so far ensured the country’s evolution was the “courage to take necessary measures”.

Zandamela also said that the significant increase in exports, especially mega-projects, and the impact of imports contributed to the positive trade balance of goods in foreign transactions in the fourth quarter of 2016.

According to data presented yesterday, exports of goods exceeded imports by an amount of US$18.2 million (17.1 million euros).

“For the first time in more than two decades, we had a situation where exports outstripped imports in this way,” he concluded.

Source: Lusa