Central Bank Denies New Restrictions On Foreign Currency

The Bank of Mozambique has denied reports circulating which claim it has issued new directives restricting transactions in foreign currency - but points out that citizens can only withdraw foreign currency if it is available in the commercial banks.

A statement issued by the central bank on Friday said there has been no change in the exchange law of 2009 and the set of regulations accompanying it. That law liberalized transaction is foreign currency and allowed anyone, whether resident in Mozambique or not, to open foreign currency accounts in Mozambican commercial banks.

Cash withdrawals from those accounts are supposed to be solely for purposes of travel abroad and are limited to 5,000 US dollars per withdrawal. The amount of foreign currency that may enter or leave the country without being declared and authorized is also 5,000 dollars. Hence this is also the largest amount of cash anyone may have in their possession. These are longstanding limits and have not been changed recently.

The catch is that foreign currency can only be withdrawn if the commercial banks have enough of it to satisfy their customers' requests. The central bank points out that importing banknotes is itself an expensive business, involving substantial payments, in foreign currency, for transport and insurance, and that money “is needed to meet the country's other priority and urgent needs”.

Large scale use of foreign banknotes for Mozambican transactions, the statement adds, is “not advisable, in the light of the measures to combat money laundering and the financing of terrorism, in line with good international practices”.


Although the statement does not mention the fact, the central bank has also intervened to make it more difficult for the commercial banks to provide their clients with foreign banknotes. In April it increased the Compulsory Reserves Coefficient - the amount of money that the commercial banks must deposit with the Bank of Mozambique - for reserves in foreign currency, from 10.5 to 15 per cent, which must be deposited in US dollars. This change took effect as from 7 June.

The central bank pointed out that the modernization of the Mozambican banking system means that nobody has to carry large amounts of banknotes on their person. Bank transfer and the use of credit and debit cards, within Mozambique, are not subject to the 5,000 dollar limit.

Even employers who pay their staff in foreign currency can do so through the banking system, simply by asking their commercial bank to transfer the funds to the workers' accounts, the statement added.