Mozambique: Commercial Banks' Mandatory Reserves Rise to 308.9 Billion Meticais

In Mozambique, the central bank (Banco de Moçambique) requires commercial banks to hold mandatory reserves, a classic monetary policy tool aimed at containing inflation and stabilizing the metical, in a country still marked by the 2016 hidden-debt crisis and increasingly dependent on natural gas revenues from Cabo Delgado. According to data reported by the AIM news agency and relayed by AllAfrica, mandatory reserves held by Mozambique's commercial banks reached 308.9 billion meticais in May, equivalent to about 4.8 billion US dollars at the current exchange rate, corresponding to a reserve ratio of nearly 31 percent. Such a level, among the highest in the region, means banks are locking up a very significant share of collected deposits, correspondingly reducing liquidity available to finance Mozambican businesses and households. For savers and borrowers, this can translate into scarcer or more expensive credit. This restrictive policy reflects a classic trade-off: prioritizing monetary stability and inflation control at the expense of real economy financing. Since the source dispatch provides no comparative data for previous months, it remains an open question whether this level marks a recent tightening of monetary policy or simple stability over time.