16/02/2023
FX Market Intelligence #232
Over the past week, according to Trading View, BdM (Banco de Moçambique) and National Statistics Institute:
*MZN ⬆ 0.05% to the USD*, at 63.23 to 63.20 (YoY ⬇ 0.01%)
*MZN ⬆ 0.85% to the ZAR*, from 3.54 to 3.51 (YoY ⬆ 16.29%)
*MZN ⬆ 0.25% to the EUR*, from 68.36 to 68.19 (YoY ⬆ 6.01%)
*USOIL ⬆ 0.73%*, from 78.44 to 79.01 (YoY ⬇ 12.82%)
*Wheat ⬇ 0.3%*, from 74.48 to 74.46 (YoY ⬆ 6.84%)
*USD/MZN* – even though foreign currency reserves have been declining in the last 12 months and import cover ratio reached a 20-year low of 1.9 months in September, *it has recovered since, to 2.1 months in November with US$ 2.763B* and, MZN only lost a 0.01% against the USD in the last 12 months.
*O&G* - oil and gas are trading at *35.49% and 73.83% down since last June and August peaks and down 12.82% and 41.94% in the last 12 months, respectively*. The Energy Regulatory Authority (ARENE) increased fuel prices by almost 20% last July and, there were decreases in the price Liquid Petroleum Gas (LPG) last December and in January, by 6.84% and 5.29%, respectively and, kept the remaining fuel prices unchanged.
*Inflation YoY* - after reaching a 5-year peak of 12.10% in August it has been decreasing since and currently at 10.28%. As part of its mandate to curb inflation, BdM’s Monetary Policy Committee *increased the Monetary Policy Interest Rate (MIMO) by 400bp during 2022*, to 17.25%. As a result, in the same period, Prime interest rate (PLRSF) increased in the same proportion, from 18.60% to 22.60%. And, in the January Monetary Policy Committee, BdM raised banks Metical reserves by 1700bp, to 28.00%. This means that bank will have to hold additional reserves and less liquidity to invest or lend.
*ZAR/MZN* – after reaching an 8-year low last October of 4.42, the pair has been ranging between 3.50-3.70 since. (Reuters) - The South African rand firmed on Tuesday against the U.S. dollar, which fell to a roughly two-week low after data showed U.S. inflation rose at its slowest pace in 16 months.
*Afinal, TotalEnergies “não tem pressa” para reiniciar o GNL*, see link: https://cartamz.com/index.php/politica/item/12947-afinal-totalenergies-nao-tem-pressa-para-reiniciar-o-gnl
*South African rand firms against dollar after U.S. inflation report*, see link: https://www.reuters.com/world/africa/south-african-rand-flat-with-market-focus-us-inflation-report-2023-02-14/