Maputo — The Governor of the Bank of Mozambique, Adriano Maleiane, announced on Thursday that the annual rate of inflation in 2002 was 9.1 per cent, and that over the year the Mozambican currency, the metical, only depreciated by 2.3 per cent against the US dollar.
Addressing the opening session of a meeting of the Bank's Consultative Council, held in the southern city of Matola, Maleiane said these figures meant that "overall we attained our objectives".
He said that stabilising the currency, and holding inflation to less than ten pr cent, "allowed interest rates, both on the interbank money market, and in transactions with the public to fall, as from the third quarter". He expected the decline in interest rates to continue in 2003.
The Bank of Mozambique's own key interest rate has fallen from 35 per cent in 2001 to 22 per cent. However, commercial banks are still fleecing their clients through prohibitive interest rates. Despite Maleiane's optimism, commercial interest rates, which reached 37 per cent in 2001, have only fallen to between 32 and 34 per cent, according to the figures AIM obtained at the meeting.
The spokesman for the meeting, Waldemar de Sousa, told AIM that the behaviour of both the central bank and the commercial banks seeks to allow an expansion of credit.
Maleiane stressed that the central bank's main goals are to contribute to macro-economic stability, and strengthen business confidence in the country's financial institutions. Low inflation, and less volatility in exchange rates "contribute to the desired improvement in the economic environment, help businesses take decisions on saving and on investments, and influence positively expectations for the future".
He promised that in 2003, the Bank of Mozambique will work "to maintain financial discipline, and to promote a healthy and solid financial sector".
"We are implementing a monetary policy consistent with the objectives of government economic policy - holding inflation to one digit, ensuring economic growth of over 10 per cent, and ensuring an adequate level of external resources to cope with import requirements", Maleiane said.
He added that the role of the banking supervision department was strengthened in 2002. Measures taken against some banks and foreign currency bureaus (such as fines, suspension of licences, and, in the case of the bankrupt cooperative bank Credicoop, closure) "are part of the necessary stabilisation of the financial sector", said Maleiane.
"In building up the capacity of banking supervision", he stressed, "we want not only to meet the challenges of an increasingly diversified and sophisticated financial market, but particularly to ensure that business have trust in the financial system".
