Macroeconomic Forecast Mozambique

The metical stood at MZM25.05/US$ as at January 29 2009, compared to MZN25.10/US$ at the end of 2008. The currency continues to drift gently but steadily downwards, and with the external environment unlikely to be a source of respite, we have revised our end-2009 forecast to MZN/US$25.60. Our current inflation and interest rate views still look sustainable but subject to downside risks given global market uncertainties. The latest data release confirmed our estimate for non-gold official international reserves of US$1.66bn at end-2008, and while the figures are not available yet, BOM confirms it continued to intervene in both the domestic money and currency markets in December, the scale of its operations are likely to have been judicious.

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