Mozambique’s central bank determined to close 2017 with 14% average inflation

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Mozambique’s central bank determined to close 2017 with 14% average inflation

12:07 CAT | 26 Jan 2017

In File Club of Mozambique / Rogerio Zandamela

The Bank of Mozambique expects to achieve average inflation of 14 percent by the end of the year with economic growth in the order of 5.5 percent – if identified risk factors are not severe and the relevant institutions implement the policies agreed.

To achieve this goal, the central bank will continue to guide monetary policy prudently and flexibly by taking any necessary measures in a timely manner to safeguard macroeconomic and financial stability.

At the opening of the 41st Consultative Council of Bank of Mozambique yesterday in the city of Matola in the south of the country, the central bank governor Rogerio Zandamela expressed his determination to achieve the stated goal.

The Bank of Mozambique Consultative Council ordinarily meets once a year and extraordinarily when convened by the governor.

In addition to coordinating monetary and fiscal policy, the central bank is confident that the government will successfully implement fiscal consolidation measures and structural reforms that are adequate to rebuild the country’s reputation and credibility at both International and domestic levels.

“We will continue to do our part for the resumption of the program with the International Monetary Fund (IMF), a condition for the return of bilateral, multilateral and private capital flows,” Zandamela said.

In the financial sector, the bank will remain vigilant and watchful of developments, reinforcing prudential supervision through “off and onsite” inspections.

The bank will continue to pay attention to its strategy of communication with the public, bolstering it in terms of regularity, timeliness, transparency and clarity, and focusing on various areas beyond to those solely linked to monetary policy.

Zandamela said that the bank has taken significant steps aimed at reduce the asymmetry of information among market players, and had instructed credit institutions to publish, on a quarterly basis, information on their solvency and liquidity levels starting next March.

“As part of our international engagement and objectives, in 2017 we will continue to extend our cooperation with similar institutions to strengthen the exchange of experiences regarding issues in their areas of expertise,” Zandamela said.

In this context, the Bank of Mozambique this year hosts the 8th biannual meeting of the governors of the central banks of the Community of Portuguese Speaking Countries (CPLP), where it hopes to share experiences on financial matters.

According to the governor, the emphasis on communication is especially fitting in the context of the fragility of financial systems revealed by the financial crisis, and the need to ensure the return of public confidence in the sector.

The annual meeting of the African Mobilephone Financial Service Policy Initiative is another landmark event taking place in the country with the participation of central bank governors and individuals from regulatory institutions and the Alliance for Financial Inclusion in Africa.

The meeting’s main goal is to continue to find policies to ensure greater financial inclusion of the continent’s adult population, ultimately allowing, according to the governor, improvement in the quality of life of the continents national populations.

The 41st Advisory Board of the bank sits for three days and will analyse matters relevant to the bank’s activities and to the national economy and the bank’s organizational and operating issues, and will take stock of activities and program future actions.

The first two days of the meeting are reserved for discussion of internal issues. The third and final day (Friday) will be open to public debate on the theme: ‘Challenges of Modernization of the Monetary Policy Regime: The Case of the Bank of Mozambique’.

Source: AIM Moçambique