Metical: Strong resilience against the US dollar for more than six months – Carta

Login

Register

http://www.clubofmozambique.com/

Metical: Strong resilience against the US dollar for more than six months – Carta

1:38 CAT | 01 Dec 2021

File photo: Lusa

For more than six months, the national currency, the metical, has been resilient to the US Dollar (USD) and other currencies.

While, for little more than half a year, it showed little fluctuation, standing at 63 to 64 meticais per USD, in the same period of 2020, the dollar was bought at just over 70 meticais.

According to Fitch Solutions, by the end of 2021, the national currency will depreciate against the USD to 71 meticais per USD, and to 68 meticais, according to the Ministry of Economy and Finance.

The year is not over yet. With 31 days to go, many events could reverse the current status of the metical in relation to other currencies. One possibility is greater demand for other currencies because of the festive season and, consequently, lesser supply of the national currency.

The fact is, however, that four weeks before the end of 2021, the metical is still resilient to other currencies, more than six months later. According to the Bank of Mozambique exchange rate on 29 November, the reference for commercial banks and exchange houses, US$1.00 was bought for 63.2 meticais and sold at 64.46 meticais.

On sale, €1.00 is equivalent to 71.2 meticais and 72.62 meticais to purchase. The rand is bought at 3.92 meticais and sold for 4 meticais. In fact, the stabilisation of the metical is effected by the greater availability in the national market of those international currencies, thanks to the Bank of Mozambique, with the emphasis on the USD.

It should be recalled that, in early May, among measures to face the Covid-19 pandemic crisis, the Mozambican financial system regulator announced the injection of US$60 million in order to meet the demand for liquidity in foreign currency in the Interbank Foreign Exchange Market.

It should be noted that by this time, in 2020, the metical was in large depreciation. A USD was equivalent to just over 72 meticais, €1.00 cost 83 meticais, and one rand cost 4.6 meticais.

By Evaristo Chilingue

Source: Carta de Moçambique