Mozambique’s banking system is stronger after interventions at two institutions that were in a troubled situation, the governor of the central bank said on Wednesday at the opening session in Lichinga, Niassa province, of the Consultative Council of the Bank of Mozambique.
“As a result of the interventions, the solvency ratio of the system increased from minus 8.0% in the fourth quarter of 2016 to around 20% at the end of 2017,” Rogério Zandamela said, quoted by Mozambican daily newspaper Noticias.
“In the adjustments made to the mechanism for conducting monetary policy, we adjusted the regime for setting up obligatory reserves on a daily basis to a medium basis and signed a tripartite agreement with the banks and the Mozambican Association of Banks, with a view to standardising the calculation basis of the interest rate, by introducing a single through the institution of a single index benchmark,” he noted.
In terms of exchange rate policy, the benchmark exchange rate was introduced, establishing the principle of a single exchange rate, with the aim of ensuring greater transparency and credibility of the rates practised in the foreign exchange market, Zandamela said.
The governor also said that, as a result of many of the measures implemented in recent times, Mozambique’s external position had improved, both in terms of the balance of payments and international reserves, reflecting the country’s ability to honour its foreign commitments.
Zandamela said that the current account deficit had been reduced by US$1.740 billion and that gross international reserves increased to US$3.3 billion, enough to cover seven months of imports of goods and services, excluding those of large projects, compared to three months of coverage at the end of 2016.