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BdM Announces Removal of Foreign Investment Barriers

BdM Announces Removal of Foreign Investment Barriers

The Bank of Mozambique (BdM) announced this Tuesday, 18 June, the “removal of barriers” to foreign investment and investments by residents abroad, including international trade, increasing the annual limit to 63.2 million meticais (one million dollars) without the need for prior authorisation.

In a statement quoted by the Lusa news agency, the central bank explained that the changes are the result of “new exchange regulations, already in force, to remove barriers to foreign investment in Mozambique and investments by residents abroad, as well as facilitating international trade, which is summed up in the creation of mechanisms to make exchange operations more flexible through the gradual liberalisation of the capital account”.

By way of example, the Bank of Mozambique clarified that in Foreign Direct Investment, operations on participation certificates in collective investment bodies and operations on securities and other instruments traded on the over-the-counter capital market in Mozambique, the amounts “that can be realised without prior authorisation from the Bank of Mozambique” increased from the previous 15.8 million meticais (250,000 dollars) to 63.2 million meticais (one million dollars) a year.

According to the BdM’s information, “it will also be mandatory to pay in national currency for all domestic transactions in the country and to harmonise the various special exchange rate regimes in force, within the scope of mining and hydrocarbon exploration projects, without, however, calling into question the commitments already made in this area”.

At stake are changes to the Foreign Exchange Law, the legislation on the rules and procedures to be observed when carrying out foreign exchange operations and the regimes for the Liberalisation of Capital Operations, Other Foreign Exchange Operations and the Repatriation and Conversion of Revenues from the Export of Goods, Services and Income from Investments Abroad.

The aim, according to the BdM, is to achieve “greater speed in carrying out foreign exchange operations, guarantee a greater inflow of foreign capital and greater availability of foreign currency, as well as promoting the appreciation of the national currency and a stable, dynamic and robust foreign exchange market”.

With the new regulations approved and presented on Tuesday, the central bank said it also wanted to “legitimise the institution’s intervention and role as a foreign exchange authority, to assign clear competences in foreign exchange matters and to guarantee the timeliness of regulations, which will now be made through notices from the governor, given that foreign exchange matters are very dynamic and require permanent and timely intervention by the authority so that it can correct any anomalous situation that could distort the functioning of the market.”


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