Mozambique will limit banks and foreign exchange bureaus to a maximum spread of 2 percent in all currency trading, the central bank said on Tuesday as it posted new regulations.
The debt-ridden southern African nation is one of the world’s poorest and a large share of foreign currency trading is done on the black market. “The institutions covered by this notice must observe the maximum spread of 2 percent between the respective exchange rates of purchase and sale, in the transactions they carry out with their clients,” the central bank said on its website.
Every bank or foreign exchange bureau is also only allowed to practice a single selling and a single buying rate for each currency, though these rates may change during the day, the state news agency reported. Different exchange rates compromised the credibility of the exchange rates practiced in the exchange market, the central bank said.
Under a 2005 law, institutions were free to set their spread and traded forex with different rates, but the central bank said failing to comply with the new rules will be punishable.