Speed-reports-2011-010 the impact of exchange rate fluctuations on the economy of mozambique (2)

IMPACT OF EXCHANGE RATE FLUCTUATIONS ON THE ECONOMY OF MOZAMBIQUE

DECEMBER 2011

SPEED/REPORTS/2011/010

This publication was produced for review by the United States Agency for International Development. It was prepared by DAI and Nathan Associates.

IMPACT OF EXCHANGE RATE FLUCTUATIONS ON THE ECONOMY OF MOZAMBIQUE

Program Title: Sponsoring USAID Office: Contract Number: Contractor: Date of Publication: Author: Publication number:

Mozambique Support Program for Economic and Enterprise Development (SPEED). USAID/Mozambique EDH-I-00-05-00004-00/13 DAI and Nathan Associates 15 December 2011 Tyler Biggs SPEED/REPORTS/2011/010

The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. The author would like to thank Mr. Waldemar F. De Sousa, General Manager Bank of Mozambique, and members of his team, Mr. Navalha and Dr. Rungo of the Research Department, for providing data and helpful comments on the study. In addition, the author is most grateful to Mr. Victor Lledo and Rolando Wane of the IMF Office in Mozambique and the IMF Mozambique Team in Washington, D.C., Patrick Gitton and Karina Garcia, for reviewing the study and providing insightful comments and to Mr. Jeu Zango of Standard Bank for providing helpful information on the workings of the foreign exchange market

Contents
1.0 2.0 Introduction .................................................................................................................................. 1 Overview of Developments in the Metical Exchange Rate Since 1995 ....................................... 2

2.1 Bilateral Rates ..................................................................................................................................... 2 2.2 Effective Exchange Rates ...............................................................................................................