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BdM: Mozambique’s Bank Reserves Grow by Over 270% in Six Months

BdM: Mozambique’s Bank Reserves Grow by Over 270% in Six Months

The volume of Mozambican bank reserves grew by more than 270% in six months, to a record 232.3 billion meticais, as a result of intervention by the Bank of Mozambique to “absorb” excess liquidity.

At the beginning of January, the obligatory reserves of the commercial banks at the central bank were set at a coefficient of 10.5% in national currency and 11% in foreign currency, and then totaled 62.6 billion meticais.

However, in the first six months of the year, the BoM 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, with 39% of deposits in national currency and 39.5% in foreign currency remaining in bank reserves.

The following month, in July, according to official data to which Lusa had access this Tuesday (3), these bank reserves amounted to 236.3 billion meticais, translating into an increase of 277% in the space of six months.

Back in June, after the second increase in these coefficients, the Confederation of Economic Associations of Mozambique (CTA) considered that the decision made it even more expensive to take out bank finance, which is essential in an economy of small and medium-sized companies, which would find it more difficult.

Mozambican economists heard at the time also considered the central bank’s decision to increase the reserve requirement coefficients to be “harmful” for companies, pointing out that the measure would not solve the inflation spiral, as it is a variable conditioned by “structural problems”.


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