According to the latest statistical report from the Bank of Mozambique, the country’s foreign currency reserves hit a one-year low in February, dropping to $3.593 billion (€3.109 billion). They increased by 1% in March to $3.619 billion (€3.131 billion) and rose another 4.3% in April, as reported by the central bank.
In April, these international reserves were sufficient to cover over three months’ worth of estimated import needs.
The reserves, which ensure the payment for goods and services from abroad by companies, reached $3.807 billion (€3.294 billion) in July 2024, marking a three-year high.
Bank of Mozambique Governor Rogério Zandamela acknowledged on May 30 that the country experienced an “economic dollarization” between late 2024 and early this year following the post-election crisis, particularly in attempts to withdraw foreign currency from banks.
“Historically speaking, it was not clear at the time, but certainly January was the most difficult moment [….], let’s say, from the end of the year, December, January. Things calmed down after that,” the governor stated in response to journalists following the Monetary Policy Committee meeting in Maputo.
Zandamela was questioned about the assurance he provided at the end of March regarding sufficient liquidity in the foreign exchange market, as businesses complained about the lack of access to foreign currency for imports. Subsequently, the central bank adopted regulations in the following month to facilitate the process.
According to the governor, the position resulted from an assessment conducted at the time, revealing an effort in the market to “shield itself with the dollarization of financial and non-financial assets.”
“This is not uncommon. When a crisis occurs—let’s speak openly—it’s also an issue of trust. When it shakes confidence, you all saw people traveling abroad during that period, many leaving the country. Some lost confidence in the country, some wanted to sell everything and leave: ‘Does our country have a future or not?’ This pressure isn’t surprising; it happened. But no one said what they were doing, and they weren’t going to,” he asserted.
“There was indeed pressure [on access to foreign currency], and it was very strong. The banking sector played a role […], banks know their clients,” he guaranteed.
Mozambique’s post-electoral period following the general elections on October 9, 2024, was the most complicated yet, with protests, disruptions, lootings, and the destruction of companies and public institutions as forms of contesting the results. Clashes with the police resulted in around 400 deaths, according to organizations on the ground.
The violence ceased after a March 23 meeting between presidential candidate Venâncio Mondlane, who does not recognize the election results, and called the protests, and Mozambican President Daniel Chapo, inaugurated on January 15. During the meeting, both agreed to put an end to the violence in the country.
