Good afternoon. You do not have to spend long talking to a major Mozambican business owner before they start complaining about the lack of foreign currency in the country. So it is not surprising that the CTA business association has raised the issue again in response to the latest interest rate decision from the Bank of Mozambique. The central bank cut its benchmark interest rate, the Mimo rate, from 9.5% to 9.25% on Thursday, a move the CTA naturally welcomed. But the association would also like the bank to reduce the foreign currency reserve requirements on banks.
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Unlike interest rates, which the bank has been steadily cutting every month for the past two years now, the reserve requirements have hardly changed recently. This, businesses argue, makes it very hard for them to find the US dollars or South African rand to pay for goods and services abroad, which in turn restricts their chances of growth.
