Macroeconomic Forecast Mozambique

The metical has been steadily losing value against the US dollar since mid 2008. Threatening in ealy April the units all-time low of MZN29.05/US$ set in November 2005, the unit has eased somewhat to around MZN27.00/US$, although this is still around 13% off its mid-08 level. We see further weakness over 2009 to around MZN29.00/US$ especially if donor support - annonced in late May - disappoints.. Aid funds more than 50% of the state budget, so the announcement is significant.

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