Mozambique: International reserves grow in December after two months of falls

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Mozambique: International reserves grow in December after two months of falls

12:03 CAT | 07 Mar 2025

FILE - For illustration purposes only. [File photo: Business Live]

Mozambique’s Net International Reserves (NIR) grew in December, following two months of falls, to $3.740 billion (€3.453 billion), the highest figure since September, according to official data from the country’s central bank.

According to statistical data from the Bank of Mozambique consulted on Friday by Lusa, foreign currency reserves shrank in October and November, to €3.682 billion (€3.400 billion), but then grew by 1.5% in December.

At the end of September, NIR had totalled $3.762 billion (€3.474 billion) and covered around three months of import needs.

These reserves, which guarantee payment abroad for goods and services by companies, had in January 2024 grown to almost €3.601 billion (€3.325 billion), which was then the highest figure since September 2021, and in July they reached €3.807 billion (€3.515 billion), a three-year high.

The governor of the Bank of Mozambique, Rogério Zandamela, said on 8 November that the country’s foreign currency reserves are comfortable, but that they were not to be “burned” through.

“We won’t burn reserves and we’re not burning reserves,” said Zandamela, in outlining the bank’s view of the country’s medium-term economic prospects in Maputo. “They are still there to allow our country and our institutions to function normally.”

Faced with the lack of foreign currency on the domestic market, businesses in Mozambique have insisted in recent months on the need for the central bank to ease the mandatory reserve coefficients in foreign currency, which obliged banks to deposit 39.5% of the total with it, compared to just 11.5% in 2022.

This decision only came in after 27 January, when the Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to cut the mandatory reserve coefficients in national currency to 29.00% and in foreign currency to 29.50%.

This was, according to the statement from that CPMO meeting, with “the aim of making more liquidity available to support the economy in restoring productive capacity and the supply of goods and services.”

Source: Lusa