Identifying Determinants of FX Stability in Mozambique

Samuel Mann and Alexis Meyer-Cirkel

No 2024/233, IMF Working Papers from International Monetary Fund

Abstract: In early 2021, as monetary policy tightening reversed a multi-year trend of Metical depreciation, the exchange rate vis-à-vis the US dollar de facto stabilized. This report discusses elements of the market structure and other drivers of Metical stability since mid-2021. The particularities of Mozambique, a small open economy with an export sector that has a strong foreign currency cost structure, provide important insights into that discussion, as does the structure and development of the Foreign Exchange (FX) market.

Keywords: Mozambique; Foreign Exchange Stability; Exchange Rate Regimes; Central Bank Policy; FX Market Structure; Market Intervention; FX stability; cost structure; development of the foreign exchange; reference rate; MZN exchange rate fluctuation; market participant; FX supply; Exchange rates; Currency markets; Currencies; Imports; Global (search for similar items in EconPapers)
Pages: 22
Date: 2024-11-08
New Economics Papers: this item is included in nep-ban, nep-cba and nep-mon
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