Banking Economy Finance Government Mozambique

Mozambique: Restrictions On Bank Card Use Remain in Force

Restrictions on the use abroad of Mozambican bank credit and debit cards will remain in force for the immediate future, the spokesperson for the Bank, Waldemar de Sousa, confirmed on Monday.

Under these restrictions nobody can use bank cards outside the country to withdraw funds or make purchases in excess of 700,000 meticais (about 15,380 US dollars).

Speaking at a Maputo press conference, Sousa denied that this measure, announced in late 2015, was merely intended to hold back expenditure during the festive season. It will remain in force until instructions to the contrary, and no commercial bank is authorized to allow any exceptions to the rule.

On 30 November, the governor of the central bank, Ernesto Gove, had warned that large sums of money were leaving the country due to the unrestrained use of bank cards abroad, and that this type of spending has risen dramatically. Three years ago the use of bank cards abroad drained the country of around 300 million US dollars a year, but by 2015 the figure had risen to 800 million dollars a year.

Sousa said the restriction on the use of bank cards was among the measures intended to allow a recovery in Mozambique’s international reserves, in order to help ensure the country’s macro-economic stability.

Sousa added that that there must be greater rigour in pursuing the financial objectives laid down for the current year, and that included restoring the level of the international resources by containing expenditure.

In the last few months of 2015, the reserves were run down, partly because of the central bank’s sales of foreign currency on the inter-bank exchange market, in an attempt to shore up the national currency, the metical.

This appears to have been successful. Rapid depreciation in October and November brought the metical down to a rate of around 60 to the US dollar in some segments of the market. However, from late November on, the metical has gained in value, and is now quoted at around 45.5 to the dollar.

Sousa announced that the international reserves will be one of the themes discussed at the forthcoming Consultative Council of the Bank of Mozambique, to be held in the western city of Tete from Wednesday to Friday.

He warned that recovery from last year’s shocks to the economy is still threatened from the low prices of some of the main commodities that Mozambique exports (such as coal, aluminium and natural gas), and from the impact of natural disasters.

Prolonged drought is threatening to wipe out harvests in southern Mozambique, while storms and torrential rains are posing a problem in the north.

These climatic factors “could cause a setback to our recovery”, said Sousa. These problems, he believed, made the task of the central bank still more complex, since recovery strategies would have to be devised which took them into account.

Source: AllAfrica

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