The Bank of Mozambique, in its role as regulator of the national financial system, has decided to increase the amount of foreign currency revenue that exporting companies must convert into national currency from 30 to 50 per cent.
The measure follows complaints from the Confederation of Business Associations of Mozambique (CTA), which has been claiming that the shortage of foreign currency is threatening the survival of companies.
Last February, 63 companies submitted pending requests to the CTA for the payment of import invoices for raw materials and goods, some of which have been awaiting settlement for more than six months due to a shortage of foreign currency in the commercial banks.
The country’s Association of Fuel Retailers (ARCOMOC) recently claimed that the shortage of foreign currency is compromising the import of liquid fuels, after several fuel pumps throughout the country ran out of both petrol and diesel.
The shortage of foreign currency is also affecting the baking industry as some companies are facing difficulties in importing raw materials, particularly wheat. Mozambique produces very little wheat, and is thus overwhelmingly dependent on imports to make bread and pasta.
According to the Bank of Mozambique statement, the measure will allow the commercial banks to have more dollars to make available to the exchange market.
“The Bank of Mozambique, in its capacity as the foreign exchange authority, has approved a notice that increases the conversion rate on income from the export of goods and services and income from investment abroad from the current 30 to 50 per cent”, reads the document.
The new rate, the note says, will be in force for a period of 18 months “in order to provide greater flexibility in the management of foreign currency by intermediary banks in the face of the current socio-economic situation.”
“This notice establishes the system for the repatriation and conversion of income from the export of goods, services and investment income abroad. For the purposes of this notice, income resulting from credits and loans granted abroad is treated as investment income abroad. This notice applies to all parties involved in foreign exchange transactions carried out under the Foreign Exchange Law”, reads the document.
Source: AIM
