Mozambique: Social security hopes to double number of beneficiaries by 2031
Bank of Mozambique warns that public debt remains high – RM
9:33 CAT | 27 Jan 2023
File photo: Lusa
The Monetary Policy Committee of the Bank of Mozambique(CPMO) has warned that public debt in the country remains high.
According to a communique issued by the central bank on Wednesday, domestic public debt currently stands at 288.7 billion meticais, an increase of 13.6 billion meticais compared to December 2022.
Governor Rogério Zandamela announced that the central bank had decided to keep the monetary policy interest rate (MIMO) at 17.25 percent.
The CPMO also ordered a sharp increase in the compulsory reserves that the commercial banks must deposit with the Bank of Mozambique. For local currency, the reserves rise from 10.5 to 28 per cent, and for foreign currency from 11.5 to 28.5 per cent.
The CPMO said the purpose of this rise is to absorb excessive liquidity in the banking system, which is generating inflationary pressures.
READ: Mozambique hikes bank’s reserve requirement ratios – Watch
“The measure taken by the Monetary Policy Committee of the Bank of Mozambique stems from the prevalence of high risks and uncertainties underlying inflation projections, with emphasis on the impact of the liquidity generated in the economy, resulting from the pressure on public expenditure, and the continued geopolitical tension in Europe,” he said
Speaking this Wednesday in a televised communication after the first 2023 ordinary session of the central bank’s Monetary Policy Committee, Governor Zandamela pledged that the institution would continue to monitor risks and uncertainties, with the aim of maintaining stability in the domestic economy.
READ: Mozambique: Central Bank keeps interest rates unchanged
Source: Radio Moçambique
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