Physical money in circulation in Mozambique grew by 6.5% over the past year, reaching 70.1 billion meticais (one billion dollars) in September, according to data from the statistical report of the Bank of Mozambique (BoM). The growth reflects the evolution of monetary policy and the circulation of banknotes and coins in the country.
According to the report, in December of last year, money in circulation had reached a historical high of 71.5 billion meticais (1.1 billion dollars), following consecutive monthly increases since March. This period marked the peak of liquidity in the market.
In September 2024, Mozambique had 66 billion meticais (102.5 million dollars) in notes and coins. This was followed by several consecutive monthly declines, despite the introduction of a new series of the metical on June 16, 2024.
The withdrawal of money from circulation is a common practice in contractionary monetary policy. Usually used by central banks, it aims to reduce the money supply and contain price increases in the domestic market.
Prices in Mozambique registered new deflation in July, for the fourth consecutive month and the eighth in 15 months, according to previous data from the National Institute of Statistics (INE). This phenomenon reflects a containment of inflationary pressure throughout the year.
Meanwhile, inflation rose again in October, increasing by 0.47%, double the rise recorded in the previous month. Nevertheless, the year-on-year variation slightly declined to 4.83%, according to INE.
The accumulated inflation for 2024 stood at 4.15%, below the 5.3% recorded in 2023 and well below the nearly 13% peak reached in July 2022. These figures demonstrate the historical volatility of prices in the country.
The government expects Mozambique to close 2025 with inflation around 7%. This projection points to relative price stability, maintaining a balance between money circulation and BoM’s monetary policy.
Source: Lusa
