The business sector considers “worrying” the suspension of Standard Bank from the foreign exchange market, considering the role that this banking entity plays in the national financial sector. Although it is still temporary, the business community foresees that the measure will result in huge losses in their businesses, especially in the process of exporting and importing goods.
Roque Magaia, representative of the Confederation of Business Associations of Mozambique (CTA), warns that the measure adopted by the Bank of Mozambique in suspending Standard Bank from the exchange system “will create an embarrassment in the market” both at the micro and macro level of the economy.
According to Magaia, “the first thing that must be taken into account in this process is that Standard Bank is the main player in the Mozambican foreign exchange market, where it holds approximately 45% of foreign currency deposits, meaning that it is the one that determines the dynamics of this market”, stressing that “the exclusion of a bank that has this role in the foreign exchange market will have significant impacts on the Mozambican economy”.
What impacts? For Roque Magaia, the first impact has to do “with a predictable drop in liquidity in the financial system. And if the Bank of Mozambique does not inject liquidity, there may also be a drop in the level of liquidity of foreign currency, which will obviously create pressures for the exchange rate. So it is important to take this into account,” he says.
Therefore, “although the Bank of Mozambique has informed that all these transactions will be transferred to other banks, this process of transfer to other banks may eventually cause some delay in the process of imports and exports. And for the business sector, “these delays may imply financial losses due to the fact that this transfer will not be automatic.
“We believe that companies will not be able to adjust to this process in the short term,” he tells us.
For now, the business association has not yet taken an official position on the measures imposed by the Bank of Mozambique, noting only that it is “monitoring” the issue until a definitive decision is made.
