According to the bank’s chief economist, Fáusio Mussá, this scenario is due to a series of shocks, internal and external, to which the national economy has been exposed, with emphasis on the impact of climate change on food prices and the war in Ukraine on fuel prices, with an effect on other prices in the economy.
To respond to these threats, he explains, the government has announced, for example, the intention to subsidize transportation, as well as a component of fuel imports to ensure a certain stability of prices, “especially since the most vulnerable layers of our society are the ones who suffer the most from the impact of rising fuel prices.”
“In this scenario, our expectation is that the Bank of Mozambique will maintain the monetary policy reference interest rate (MIMO) until the end of the year at the current level of 15.25%, but there is no guarantee that this will happen, especially if there is some surprise that translates into higher inflation than expected,” he stressed.
Fáusio Mussá, who was speaking recently, in the virtual session of the Economic Briefing, showed concern with the fall of international reserves, which has resulted in the reduction of months of imports coverage to about 4.7 months, which may have an impact on the evolution of the Metical.
Held regularly by Standard Bank, the Economic Briefing is an event that aims to guide its clients, in particular, and the market, in general, in decision making, by sharing the main trends of the national economy.