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BoM: “Money in Circulation in Mozambique Increased By More Than 10% at Year-End”

BoM: “Money in Circulation in Mozambique Increased By More Than 10% at Year-End”

Data from a statistical report by the Bank of Mozambique (BoM) indicates that physical money circulating in Mozambique increased by 10.6% in the space of a month, closing December at 78.2 billion meticals (1.1 billion euros).

According to the document, quoted this Tuesday, 16 January, by the Lusa news agency, the money in circulation in the country at the end of December 2023 corresponded to almost 243.2 million banknotes and 553.1 million coins, and compares with the total value of 70.7 billion meticals (1 billion euros) circulating at the end of November.

Despite this growth in the space of a month, the money in circulation at the end of 2023 was still 2.3 per cent lower than the 80.8 billion meticals (1.1 billion euros) circulating in Mozambique in December 2022.

Withdrawing money from circulation is a usual practice of contractionary monetary policy, reducing the money supply, normally used by central banks to contain price rises.

Last December, the 20 meticais banknote was the most widely circulated in Mozambique, with 47.8 million units, while the 0.50 meticals led the coins, with 122.8 million units.

Mozambique recorded accumulated inflation of 5.30% in 2023, having grown by 1.29% in December compared to November, according to data released on Thursday 11 January by the National Statistics Institute (INE).

The agency’s data indicates that Mozambique “recorded a rise in the general price level of around 5.30 per cent over 12 months, from January to December”.

“The food and non-alcoholic beverages division saw the biggest rise in prices, contributing 3.34 percentage points,” says INE in the Consumer Price Index (CPI), adding that when analysing the accumulated variation by product, “it is important to highlight the rise in prices of dried fish, maize grain, tomatoes, complete restaurant meals, nhemba beans, fresh fish and beers for consumption away from home”.

According to INE, “these contributed around 2.51 positive percentage points to the total accumulated variation”.

With regard to the 12-month average variation, the indicator says that “Mozambique recorded a price increase of around 7.13 per cent”.

“The divisions of education, miscellaneous goods and services and food and non-alcoholic beverages were the most noteworthy, rising by 11.27 per cent, 10.50 per cent and 10.03 per cent respectively,” it reads.

In the monthly variation, prices in Mozambique, according to INE, rose by an average of 1.29% in December, accelerating from the 1.17% increase in November.

Mozambique’s Minister of Economy and Finance, Max Tonela, said in December that the country’s economy would have grown by the equivalent of 5% of GDP in 2023 and could reach 5.5% in 2024. Inflation, on the other hand, according to government forecasts, should stand at 7 per cent in 2023, repeating the same figure in 2024.

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