Legal Update/Mozambique: Valuation Exchange Rate Regime

The Bank of Mozambique (BoM) has updated the the Valuation Exchange Rate Regime and the Exchange Rate Unicity Principle, according to official legal database Legis-PALOP+TL.

According to two new BoM notices, as of January 29, 2023, credit institutions and finance companies and banks and exchange offices are, respectively, subject to the following obligations, under penalty of fines whose amounts may amount to MZN 140 million (approximately USD 2,200,000):
⦁ Credit institutions and financial companies must use the valuation exchange rate for the conversion, into national currency, of the value of their assets and liabilities expressed in foreign currency, and must also take into account the following rules:
⦁ The valuation exchange rate of a certain date corresponds to the last reference exchange rate of the foreign exchange market;
⦁ The value of gold is determined by the latest quotation made available by BoM, in US Dollars, to which the exchange rate based on the parity between the United States Dollar and the Metical applies.

Legal Update/Mozambique: Framework for bank accounts provided by credit institutions

Banks and exchange offices must:
⦁ Arbitrate single exchange rates in the foreign exchange market, regardless of the nature and purpose, whether through the purchase and sale of currency, banknotes or metallic coins, and other operations of payments or receipts abroad;
⦁ Refrain from arbitrating exchange rates that may constitute market manipulation practices, i.e. abstain from the set of practices carried out by one or more market participants, in order to artificially influence the demand and/or supply of foreign currency and, therefore, the exchange rate level, including, but not limited to, the attempt or act of: i) disseminating false or misleading information; ii) carry out operations or place orders to demand or offer foreign currency in such a way as to mislead market participants; and iii) acting in concert or not to ensure a dominant position on the supply or demand for foreign currency in such a way as to generate unfair trading conditions;
⦁ Refrain from using non-current exchange rates, in the sense that they are dissociated from market conditions at the time of their formation;
⦁ Publish the exchange rate table in a visible place that is easy for the public to consult.

 

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