Mozambique’s Net International Reserves (NIR), needed for imports of goods and services, grew by 1.5 per cent in November, to almost 3,070 million dollars (2,763 million euros), due to the provisioning of banks, according to official figures.
According to a statistical report from the Bank of Mozambique, to which Lusa had access today, these reserves – in foreign currency – totalled 3,024.8 million dollars (2,722.7 million euros) at the beginning of November and the growth was driven by the “provisioning of banks”, obliged to set aside reserves, which grew by 165.3 million dollars (148.8 million euros) in the space of a month.
In addition, these figures – which total an absolute increase of 44.9 million dollars (40.7 million euros) in reserves compared to the end of October – include a further 15.7 million dollars (14.1 million euros) for projects in the country and 18.5 million dollars (16.6 million euros) in miscellaneous purchases of foreign currency.
Among the 234.5 million dollars (211 million euros) of outflows from reserves in November, 151.8 million dollars (136.6 million euros) came from transfers made by banks and 21.7 million dollars (19.5 million euros) related to servicing Mozambican debt, among others.
Mozambique closed the month of November with enough reserves to cover 3.1 months of expected import needs for this year, which rises to 3.8 months “excluding major projects”, according to the Bank of Mozambique.
Last January, the Bank of Mozambique increased the ratio of mandatory reserves to foreign demand deposits from 11.5 per cent to 28 per cent, and in April it reduced the supply of fuel to importers from 100 per cent to 60 per cent.
In the 2023 State Budget, the Mozambican government set the goal of building up Net International Reserves of 2,936.6 million dollars (2,686 million euros), “corresponding to three months’ coverage of imports of non-factorial goods and services”.
Mozambique’s international reserves have been falling since 2021, the International Monetary Fund (IMF) announced in July.
“Gross international reserves cover almost 4.3 months of imports [end-2022], which is above the commonly recommended minimum buffer,” of “at least three months,” says an IMF report on the final approval of the review of the Extended Credit Facility (ECF) for Mozambique.
The report adds that Mozambique’s international reserves have been “falling since the beginning of 2021” and reached 2.9 billion dollars (2.580 million euros) at the end of last year.
The IMF recognises the impact of the “high costs” of fuel imports on Mozambique’s international reserves, given the supply of foreign currency to the main fuel importers.
“At the same time, imports not related to megaprojects have increased significantly in the last two years, further reducing the import coverage of reserves,” the document notes.
Lusa
