The Bank of Mozambique (BoM) said that reserves held by Mozambican banks fell for the second month running, standing at 251.1 billion meticals (3.8 billion dollars) in May.
The institution’s statistical report recalled that in March, the volume of these reserves hit a record high, standing at 255.1 billion meticals, a scenario that began to change in April, when they fell to 254.2 billion meticals.
“The compulsory reserves of commercial banks were set at a coefficient of 10.5% in national currency and 11% in foreign currency at the beginning of January 2023,” explained the document, published on Thursday 11 July by Lusa.
According to the central bank, “in the first six months of last year, the Bank of Mozambique increased this coefficient twice, arguing that it was necessary to absorb excessive liquidity in the banking system, with the potential to generate inflationary pressure”.
“The last of these increases took place in June, reaching 39 per cent of deposits in national currency and 39.5 per cent in the case of foreign currency to be held in bank reserves,” he added.
Following this increase, the Confederation of Economic Associations of Mozambique (CTA) considered that the decision made it even more expensive to take out bank finance, an essential mechanism in an economy of small and medium-sized enterprises.
On the same occasion, national economists considered the BoM’s decision to increase the mandatory reserve coefficients to be “harmful” for companies, pointing out that the measure “won’t solve” the inflation spiral, because this “variable” is conditioned by “structural problems”.
