August 15, 2010

Central Bank to pay fuel imports

The Bank of Mozambique will temporarily provide funds to pay fuel imports that until recently were paid by commercial banks. Currently, Mozambique is facing high inflation rate, which the Monetary Policy Committee blames on the strengthening of the South African rand against the Mozambican currency, the metical, and on rises in the price of fuel (after a 12 month fuel price freeze) and of water. The rand/metical exchange rate is crucial because Mozambique imports large amounts of food from South Africa.

"In compliance with a resolution of the 8th Session of its Monetary Policy Committee (CPMO), the Bank of Mozambique will temporarily disburse foreign currency required to pay the of bill fuel imports, which may translate in the release of about 250 million US dollars by the end of the year", reads a press release posted on its website.

Speaking on the sidelines of signing the ceremony of an agreement with the European Investment Bank (EIB) for the education sector, the governor of the Bank of Mozambique, Ernesto Gove explained that the country will spend about 550 million U.S. dollars for fuel imports in the 2010, up from 328 million US dollars last year. 'As time goes by we are identifying other constraints. Therefore, we must clarify what should be done by the government and economic players, 'said Gove.

'I'm quite happy because though exports dropped in the fiscal year 2008/09, now we have entered the stage of recovery being the reason we believe in a speed recovery to achieve the desired stability in the country,' he declared. On the occasion, Gove urged other economic actors and the population at large to transform current challenges into opportunities by identifying new productive areas.

'We have to focus more on the agriculture sector as most goods are imported from the neighbouring South Africa when there are in the country about 36 million hectares of arable land. We must seize this comparative advantage to replace imports, mainly of vegetables', said Gove. (AIM)

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