Mozambique: Physical cash in circulation increases by 6.5% in last 12 months

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Mozambique: Physical cash in circulation increases by 6.5% in last 12 months

2:11 CAT | 30 Jul 2025

File photo: Lusa

The amount of physical cash in circulation in Mozambique reached its highest level of the year in May, at 69.396 billion meticais (€930 million), an increase of 6.5% over the last year, according to data from the central bank.

According to a statistical report from the Bank of Mozambique, cash in circulation in the country reached an all-time high of 71.512 billion meticais (€958 million) in December 2024, after consecutive monthly increases since March of last year, followed by several consecutive declines, despite the entry into circulation of a new series of the metical, the Mozambican currency.

Removing cash from circulation is a common practice in contractionary monetary policy, which reduces the money supply and is typically used by central banks to contain price increases.

Prices in Mozambique suffered further deflation in June, for the third consecutive month and the seventh in 14 months, influenced by some food and fuel prices, according to data from the National Statistics Institute (INE) reported by Lusa on July 10.

The INE’s Consumer Price Index (CPI) for June indicates that Mozambique “recorded a price drop of approximately 0.07%” compared to May, with the food and non-alcoholic beverage sector once again standing out, contributing a negative 0.12 percentage points to the total monthly change.

This is the seventh price deflation in Mozambique in just over a year, after the CPI recorded price drops of 0.11% in August, 0.05% in July, 0.21% in June, and 0.38% in May of 2024, in addition to 0.38% in April and 0.36% in May of this year, and a repeat in June (0.07%).

The INE also reports that, compared to 2024, the CPI indicates a year-on-year price increase in June of 4.15% (4.0% at the end of May and 3.99% in April), mainly influenced by the food and non-alcoholic beverages segment, as well as restaurants, hotels, cafes, and similar establishments, which increased by 9.38% and 8.53% respectively in the same year.

Cumulative inflation for 2024, according to previous data from the INE, stood at 4.15%, compared with 5.3% in 2023, but below the peak of nearly 13% reached in July 2022.

The government expects Mozambique to close 2025 with inflation at around 7%.

On June 16, 2024, Mozambique introduced a new series of metical notes and coins, which will progressively replace those in circulation since 2006, the central bank governor announced at the time.

“Central banks tend to review their notes and coins in circulation every five years to adapt them to new trends in design, security, and other contextual elements,” Rogério Zandamela explained at the time.

“The theme of the 2024 series metical notes and coins maintains the tradition of extolling the values of our cultural, historical, and wildlife heritage,” he stated.

The new series, launched on Metical Day – the Mozambican currency was launched on June 16, 1980 – kept the previous six banknotes.

“The 1,000, 500, and 200 metical denominations are on paper substrate, and the 100, 50, and 20 metical denominations are on polymer substrate,” Zandamela explained.

As for the coins, the new series removed the 20 and five centavo [cent of the metical] denominations, “keeping the 10, five, two, and one metical denominations, and the 50, ten, and one centavo denominations”.

“The new metical notes and coins will circulate simultaneously with the series of notes and coins issued since July 1, 2006, which will also continue to be legal tender and have full and unlimited disbursement power within the national territory,” the central bank governor added at the time.

Source: Lusa