Cash in circulation in Mozambique exceeds 67 billion meticais

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Cash in circulation in Mozambique exceeds 67 billion meticais

3:15 CAT | 20 Dec 2024

File photo: AIM

The amount of physical money in circulation in Mozambique increased by 2.2% in October compared to September, marking the sixth consecutive monthly rise, according to official data compiled by Lusa today.

The figure has grown by 6.6% since the beginning of the year, when 63.231 billion meticais (€943.2 million) in banknotes and coins were in circulation, especially since May, preceding the introduction of a new currency series. By October, it had reached the highest level of the year, surpassing the 63.347 billion meticais (€945 million) recorded at the start of 2023.

The withdrawal of money from circulation is a common practice in contractionary monetary policy. It reduces the money supply and is typically employed by central banks to curb rising prices. In Mozambique, year-on-year inflation has remained below 3% for several months (2.84% in November), after ending 2023 at 5.3%, well below the peak of nearly 13% in July, 2022.

On June 16, Mozambique introduced a new series of metical banknotes and coins to gradually replace those in circulation since 2006, as announced by the governor of the central bank.

“Central banks tend to update their banknotes and coins every five years to align with new design trends, security features, and other contextual elements,” explained Bank of Mozambique governor Rogério Zandamela.

“The theme of the 2024 series of metical notes and coins highlights the values of our cultural, historical, and wildlife heritage,” Zandamela said.

The new series, launched on Metical Day, which celebrates the currency’s introduction on June 16, 1975, retained the previous six banknotes.

“The denominations of 1,000, 500, and 200 meticais are printed on paper substrate, while the denominations of 100, 50, and 20 meticais are on polymer substrate,” Zandamela clarified.

As for coins, the new series discontinued the 20- and five-centavo coins, “while maintaining denominations of 10, five, two, and one metical, as well as 50, 10, and one centavo.” “The new metical notes and coins will circulate alongside the series issued since July 1, 2006, which will continue to hold full legal tender and unlimited value within the national territory,” added the governor.

Source: Lusa