The Ministry of Economy and Finance (MEF) foresees the worsening of the average exchange rate for the year 2021. In Fiscal Risks Report 2022, published at the end of last August, MEF reveals that the Metical depreciated in 2020, reaching an average of 66.6 MT/USD, against an initial forecast of 60.0 MT/USD.

"For 2021, the projections have changed with the impact of Covid-19, and a pressure on the foreign exchange market is expected, which could raise the exchange rate to 68.0 MT/USD," reads the document quoted by Carta de Moçambique.

However, compared to the initial forecast (contained in the 2021 State Budget), the MEF report shows that there has been a negative variation in the worsening exchange rate. Initially, the MEF forecast that the average annual exchange rate would reach 69.0 MT/USD.

Fitch Solutions, an international financial rating institution, also revised downward the forecast devaluation of the Metical against the dollar in 2021. If initially the forecast for the end of the year was 74 Meticais per Dollar, in August, the institution reduced it to 71 Meticais per Dollar, due to the improvement in the prices of coal and aluminum, two of the country's main export products.

As for prices, the MEF forecasts for 2021 a certain stability of the inflation level, standing at 5.0%, equivalent to a reduction of 0.5pp from last year. The source points to a probability of materialization of the deceleration risk, of the reduction of the general price level, of 42.9%.