President Daniel Chapo has accused commercial banks of “creating” a foreign currency shortage and turning it into a “business opportunity,” warning that there has never been a lack of foreign currency when it comes to distributing dividends.
“When there’s a shortage of foreign currency, people start turning that shortage into a business opportunity. This happens even in commercial banks, where you do business every day. There is no real shortage [of foreign currency], it’s a created shortage,” said Chapo during a meeting with local businesspeople in Sofala province, central Mozambique, where he has been on a visit since Monday.
On February 18, the Confederation of Economic Associations (CTA), Mozambique’s largest business association, warned that the lack of foreign currency in the banking sector was affecting operations, particularly in health, aviation, fuel, and food imports.
At the Sofala meeting, after hearing the concerns of local entrepreneurs, Chapo noted that despite the banking sector’s reported shortage of foreign currency, it has never been lacking for “distributing dividends among themselves” or “paying their own salaries.” He questioned, “Have you ever heard of it being unavailable? It only becomes unavailable for Félix Machado [a local businessman] when he wants to import something. So, this is really a situation we must continue to work to overcome.”
Chapo demanded a “transparent exchange rate policy” from the central bank to ensure that foreign currency is made available to businesspeople and to “promote development,” rather than being a “guardian of scarcity.”
Mozambique’s Net International Reserves (NIR) reached a four-year high in May, increasing to $3.825 billion (approximately 225.6 billion meticais), according to data from the central bank reported this week by Lusa.
These reserves — held in foreign currency — had hit their lowest level in about a year in February, falling to $3.593 billion (approximately 211.0 billion meticais), before registering three consecutive monthly increases. They grew 1% in March to $3.619 billion (approximately 212.7 billion meticais), 4.3% in April, and another 1.5% in May, according to the Bank of Mozambique’s latest statistical report.
In May, the volume of international reserves covered more than three months of estimated import needs.
On May 30, Bank of Mozambique Governor Rogério Zandamela acknowledged that the country had experienced a “dollarization” of the economy between late 2024 and early this year, following the post-election crisis, particularly due to attempts to withdraw foreign currency from banks.
“Looking back historically — at the time it wasn’t clear — January was certainly the most difficult moment […], I would say from December to January. Then things began to calm down,” said Zandamela, responding to journalists after the Monetary Policy Committee (CPMO) meeting.
Zandamela had been asked about his March statement assuring sufficient foreign currency liquidity, while businesses were complaining of limited access to foreign currency for imports. The central bank introduced new regulations the following month to facilitate the process.
He added that the situation stemmed from an assessment at the time, which later revealed attempts by the market to “shield itself through the dollarization of financial and non-financial assets.”
“It’s also a matter of trust. When confidence is shaken, you saw what happened — all the trips abroad during that time, many people left the country. Some lost confidence, some wanted to sell everything and leave: ‘Does our country even have a future?’ That pressure was not surprising. It happened. But no one said what they were doing, and they weren’t going to,” he concluded.
Source: Lusa
