The Bank of Mozambique : historical review from 1975 to 2010

Abstract

The Banco de Moçambique (Bank) was established in May 17, 1975. The 1920 Brussels Conference recommended that in countries without a central bank, it should be created. The ‘Bank’ followed the new model of emerging countries’ central banks (mid-1950s), where those central banks regulated and controlled an existing financial system and promoted the emergence of a money and capital market.

From 1975 the Bank performed commercial functions until 1992, when the functions of commercial banking and central banking were separated. Mozambique tried to establish a socialist society. The prevailing financial system, primarily consisting of of expatriate banks, was reorganised under the state bank. This was a restructuring and integration process. In 1980 the Metical, the new currency of Mozambique, was introduced.

In the 1980s weakening economic conditions in Mozambique mandated the reconsideration of post-independence economic policies. In 1984 Mozambique accepted assistance from the Bretton Woods institutions and from 1987 the country embraced the Economic Rehabilitation Program. The Bank embarked on monetary, credit, supervisory and regulatory policies reforms, to consolidate conventional central bank functions.