The Bank of Mozambique, regulator of the country's financial system, warns of continued inflationary pressure that in the short term could reach double digits due to the vulnerability of the economy caused by the current international macroeconomic environment and other exogenous factors, writes the Mozambique Information Agency (AIM).

The warning was made yesterday in Maputo by Emílio Rungo, senior staff of the WB, in a "briefing" to the press on the state of implementation of monetary policy. "In the medium term, the Central Bank's perspective is to keep inflation in single digits. However, in the short term and in the immediate term, we anticipate that there will be high pressure on inflation, resulting from market prices," Rungo said.

He advanced that within 15 to 60 days, according to the internal schedule, the WB Monetary Policy Committee (MPC) will meet to assess the current situation of generalized price increases and take appropriate measures to contain inflation, with a view to mitigating the effects of various shocks to the economy.

On the impact of the Russia-Ukraine military conflict on the cost of living in the country, Rungo said that trade with both countries is negligible, as it accounts for about 1.0%, with the main products being tobacco and graphite.

"The Russia-Ukraine conflict ends up having an indirect impact. The indirect effects basically translate into higher prices for fuel and other products in the international market," he explained.

About the growth perspectives of the Gross Domestic Product (GDP), the source said that it is aligned with the Government projections that point to a recovery in economic activity with effect on a growth in the economy in the order of 3.0%, sustained by the start of energy projects in Temane, Inhambane province, and in the Rovuma basin, Cabo Delgado province.

One particular aspect is the resumption of support from the International Monetary Fund (IMF) to Mozambique, which will help strengthen the state budget, relieve public debt and pressure on the exchange rate, something that could contribute to a rapid recovery of the economy.

About the current stability of the Metical against the dollar, which has raised questions, Rungo explained that a relative comfort is occurring in the foreign exchange market that contributes to the stability of the exchange rate, fundamentally explained by the confidence and fluidity of foreign exchange, translated by a balance in demand and supply.