The Governor of the Bank of Mozambique, Rogério Zandamela, revealed on Friday, May 30, that the country experienced a process of “dollarization” of the economy at the end of 2024, driven by post-election instability, which caused strong pressure on the foreign exchange market and led to attempts to withdraw foreign currency from the national banking system, reported Lusa.
“January was certainly the most difficult month. Afterwards, things calmed down,” said the governor at a press conference following the Monetary Policy Committee (CPMO) meeting held in Maputo.
When asked about the foreign currency liquidity guarantees advanced in March, at a time when businesspeople were complaining about a shortage of foreign currency for imports, Rogério Zandamela defended that the position was based on an assessment made up to that point, noting that subsequently there was a trend toward “hedging through dollarization of financial and non-financial assets.” “This is not uncommon. When there is a crisis situation (…) it is also a matter of trust. Many people left the country. Some lost confidence, wanted to sell everything they had and leave: ‘does our country have a future or not?’ That pressure is not surprising, it happened. But no one said what they were doing, and they wouldn’t say,” he stressed.
The governor acknowledged that the pressure on access to foreign currency was “very strong,” but assured that the national banking sector acted responsibly: “Banks know their clients.”
The instability originated from the general elections held on October 9, 2024, whose post-election period was marked by violent protests, strikes, and acts of vandalism, including the destruction of companies and public institutions. According to organizations on the ground, clashes with security forces resulted in about 400 deaths.
Political and social tension eased after the March 23 meeting between the President of the Republic, Daniel Chapo, sworn in on January 15, and the opposition leader and presidential candidate Venâncio Mondlane, who did not recognize the election results and called for protests. At the meeting, both agreed to end the violence in the country.
With the progressive stabilization of the political situation, the Bank of Mozambique advanced regulatory measures in April aimed at facilitating access to foreign currency, seeking to normalize the functioning of the foreign exchange market and restore economic confidence.
Source: Diário Económico
