{"id":40355,"date":"2023-06-09T10:55:45","date_gmt":"2023-06-09T10:55:45","guid":{"rendered":"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation"},"modified":"2023-06-09T11:02:32","modified_gmt":"2023-06-09T11:02:32","slug":"economy-may-have-to-bleed-to-contain-inflation","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation","title":{"rendered":"Economy may have to \u2018bleed\u2019 to contain inflation"},"content":{"rendered":"

Africa-Press – Mozambique. <\/strong><\/span>The director of the Bank of Mozambique (central bank) Silvina de Abreu on Friday acknowledged in the face of criticism from businesspeople that the economy may have to \u201cbleed\u201d in the short term, due to monetary policy, to contain inflation.<\/p>\n

\u201cWe think that it is necessary to allow for a moment, in the short term, when the economy \u2013 because of the effects of monetary policy \u2013 may be bleeding, so to speak, but for the greater good,\u201d she said at a meeting with the Mozambican Confederation of Economic Associations (CTA).<\/p>\n

\u201cWe are fighting so that, afterwards, the effect is a reduction in inflation in which all economic agents that are operating in the market can benefit from this, including families,\u201d she added.<\/p>\n

Asked whether the peak of the monetary policy measures had already been reached, Silvina Abreu did not commit to an answer. At issue is the increase in compulsory reserves that commercial banks have to keep with the central bank: the regulator decided on Wednesday to raise the coefficients to 39% of liabilities (in the case of deposits) in national currency and 39.5% in the case of foreign currency.<\/p>\n

This was the second rise of the year. At the beginning of 2023 the coefficients were 10. 5% and 11.5% respectively.<\/p>\n

Year-on-year inflation in Mozambique slowed in April to 9.6%, the lowest in 12 months.<\/p>\n

The central bank justified the action, \u201caiming to absorb excessive liquidity in the banking system, with the potential to generate inflationary pressure,\u201d but business owners think that the decision will make it even more expensive to obtain bank financing, which is essential in an economy of small and medium-sized enterprises, which will have more difficulties.<\/p>\n

\u201cWe foresee many difficulties so that [businesses] can grow, prosper and generate value for the economy,\u201d Oldemiro Belchior, vice-president of the CTA\u2019s financial policy and services portfolio, said at Friday\u2019s meeting.<\/p>\n

The increase in reserve requirements will lead to an increase in interest rates and debt service \u201cwill worsen, not only for those seeking credit, but also for those already benefiting\u201d.<\/p>\n

\u201cBusinesses will resent\u201d the \u201csignificant increase\u201d in mandatory reserves, he said.<\/p>\n

Joa\u0303o Figueiredo, president of the Portugal-Mozambique Chamber of Commerce, with a career in Mozambican banking, said that \u201cthere will be a rise in interest rates and a penalty for the entire economy,\u201d including large companies and families.<\/p>\n

\u201cWe are all going to pay the consequences of this stubborn policy on inflation,\u201d he added.<\/p>\n

Despite admitting that there may be pressure in the short term, Silvina de Abreu refuses the idea of seeing monetary policy as an eminent cause of a lack of credit for the economy.<\/p>\n

\u201cI wouldn\u2019t like it to be said that it is for this reason that credit will not be given to the economy, because there have been other times of lower inflation and there was also no routing [of credit] by the banking sector to the economy,\u201d she considered. \u201cThere will be other factors that we could then calmly check, that lead to the economy not being prioritised in terms of credit,\u201d she said.<\/p>\n

The central bank\u2019s director suggested that banking should use more \u201ccreative\u201d ways to enable financing to the economy.<\/p>\n

\u201cWe are doing our part,\u201d as the central bank, she said, otherwise it could be accused of \u201cnot playing that role and having inflation growing more than desirable\u201d.<\/p>\n

video<\/b><\/a><\/p>\n

For More News And Analysis About Mozambique<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Mozambique. The director of the Bank of Mozambique (central bank) Silvina de Abreu on Friday acknowledged in the face of criticism from businesspeople that the economy may have to \u201cbleed\u201d in the short term, due to monetary policy, to contain inflation. \u201cWe think that it is necessary to allow for a moment, in […]<\/p>\n","protected":false},"author":84,"featured_media":40354,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,18],"tags":[233,281,283],"class_list":["post-40355","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-video","tag-africa-press","tag-africa-press-mozambique","tag-mozambique"],"yoast_head":"\nEconomy may have to \u2018bleed\u2019 to contain inflation - Mozambique<\/title>\n<meta name=\"description\" content=\"The director of the Bank of Mozambique (central bank) Silvina de Abreu on Friday acknowledged in the face of criticism f ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economy may have to \u2018bleed\u2019 to contain inflation\" \/>\n<meta property=\"og:description\" content=\"The director of the Bank of Mozambique (central bank) Silvina de Abreu on Friday acknowledged in the face of criticism f ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation\" \/>\n<meta property=\"og:site_name\" content=\"Mozambique\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-09T10:55:45+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-09T11:02:32+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2023\/06\/sm_1686292278.639825.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"998\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Economy may have to \u2018bleed\u2019 to contain inflation\",\"datePublished\":\"2023-06-09T10:55:45+00:00\",\"dateModified\":\"2023-06-09T11:02:32+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation\"},\"wordCount\":574,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2023\/06\/sm_1686292278.639825.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Mozambique\",\"Mozambique\"],\"articleSection\":[\"all news\",\"economy\",\"video\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation\",\"url\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/economy-may-have-to-bleed-to-contain-inflation\",\"name\":\"Economy may have to \u2018bleed\u2019 to contain inflation - 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