Maputo, 3 Oct (AIM) – The Confederation of Mozambican Business Associations (CTA) claims that since the Bank of Mozambique decided to increase the mandatory reserves in foreign currency to 39.5 per cent, the country’s manufacturing industry has been facing constraints on imports of raw materials.
According to Zuneid Calumias, the CTA deputy chairperson, speaking to reporters, on Wednesday, in Maputo, manufacturing industry is the most affected because, up to June, it accumulated unmet foreign exchange needs estimated at 56 million dollars.
“With the impact of the lack of foreign currency on the market, the manufacturing sector recorded negligible growth of 2.9 percent in the first half of the year, due to the constraints on imports of raw materials”, he said.
Calumias explained that if the constraint continues, the country’s economic growth target of 5.5 percent for 2024 will be jeopardized, because more sectors, such as air transport and tourism, are being affected.
“In the short term, the measures to alleviate the market’s liquidity situation will involve changing the stance of the Bank of Mozambique. There is no theoretical or empirical basis for maintaining the mandatory reserve rate at 39.5 per cent for foreign currency. We therefore propose that the Bank reassess its position and reduce this rate”, he said.
In order to solve the problem, CTA calls on the Bank of Mozambique to assess its economic strategies “being open to dialogue with the national business community, which feels suffocated by the situation in the foreign exchange market.”
“The Bank of Mozambique, instead of maintaining high Net International Reserves, must inject part of them so that commercial banks gain confidence and use their positive exchange rate position to support companies”, Calumias said.
However, the CTA appreciated the fact that the Monetary Policy Committee of the Bank of Mozambique (CPMO) on Monday decided to cut the bank’s reference interest rate, from 14.25 to 13.5 per cent.
“We congratulate the Bank of Mozambique for its continuous effort to improve credit conditions for the economy and the private sector in particular”, he said.
(AIM)
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