Analysts at NKC African Economics estimate that Mozambique’s national currency unit will continue to depreciate this year, hitting 77.7 meticais per dollar against last year’s 69.5.
“We anticipate that the average exchange rate this year will depreciate to 77.7 meticais per dollar, which compares with the 69.5 meticais required for each dollar [last year],” a comment on the evolution of the Mozambican currency reads.
In the analysis sent to investors, to which Lusa has had access, experts at the African branch of British Oxford Economics write that “Mozambique’s exports from the extractive industry have remained under pressure in recent months due to operational issues”.
The consequence, they point out, is that “there will be an impact on fiscal collection and the accumulation of foreign reserves”, in addition to an “increase in the external public debt to finance the budget deficit and a reduction in the liquidity cushion via external reserves, which raises the risk of more pronounced depreciation”.
The comment from analysts comes in the context of a currency weakening this quarter, despite the weakness of the dollar, an improvement in the country’s risk assessment and the rise in the price of raw materials, they say.
The metical continues to slide towards its worst level ever, achieved at the height of the hidden debt crisis in 2016, when it traded at 78.5 meticais per dollar.
