The Bank of Mozambique has raised the proportion of export revenue that local companies must convert into national currency from 30 to 50 percent in a bid to tackle crippling shortages of foreign currency in the country.
This measure, announced Thursday, is set to last for 18 months and aims to provide commercial banks with better access to foreign currency to alleviate mounting economic pressure.
“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 percent,” the apex bank said in a statement.
According to the Bank of Mozambique, the upwards review of conversion rate is designed to enhance the flexibility of intermediary banks in managing foreign currency transactions during this socio-economic crisis.
The measure means that Mozambican exporters and individuals who earn foreign currency should sell half of their earnings to their banks at the prevailing exchange rate as soon as they receive them.
The move is expected to stabilise the exchange market by repatriating and converting export and investment incomes.
The move comes as shortages of foreign currency have triggered bottlenecks in the supply of essential imports such as fuel and wheat.
State-owned fuel company Petromoc recently warned that the foreign currency shortage is severely compromising the importation of liquid fuels.
Many fuel stations have already exhausted their supplies of petrol and diesel, exacerbating the crisis.
JN/APA