Mozambique: Banks’ mandatory reserves reach record €4.4B in 2024

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Mozambique: Banks’ mandatory reserves reach record €4.4B in 2024

12:38 CAT | 10 Mar 2025

File photo: Lusa

According to central bank data, Mozambican banks’ mandatory reserves reached an all-time high of 307.8 billion meticais (€4.441 billion) in December, up by 15% in one year.

According to data from statistical reports by the Bank of Mozambique – which has since eased the restrictive measures surrounding these reserves – the volume of these compulsory deposits made by the banks has broken consecutive monthly records over the last year and a half.

In September 2023, these mandatory reserves totalled 237.092 billion meticais (€3.420 billion) and between November and December 2024 alone they increased by more than 9%.

The mandatory reserves of the commercial banks at the central bank were set by the Bank of Mozambique at a coefficient of 10.5% in national currency and 11% in foreign currency at the beginning of January 2023.

However, in the first six months of 2023, the central bank increased the coefficient twice in order to “absorb excessive liquidity in the banking system, with the potential to generate inflationary pressure”.

The last of these increases took place in June 2023, reaching 39% of deposits in national currency and 39.5% in the case of foreign currency to be held in bank reserves.

Since the end of December 2022, when they totalled 62.144 billion meticais (€896 million), the volume of bank reserves held by the central bank has increased by almost 400%.

Faced with a lack of foreign currency on the domestic market, Mozambican businesspeople have in recent months insisted that the central bank should ease the mandatory foreign currency reserve coefficients.

This decision only came on 27 January, when the Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to cut the mandatory reserve coefficients in national currency to 29% and in foreign currency to 29.5%.

“Aiming to provide more liquidity to support the economy in restoring productive capacity and the supply of goods and services,” said the statement from the CPMO meeting.

Source: Lusa