Mozambique: Commercial banks’ mandatory reserves surge 31% in May

According to the latest statistical report from the central bank, commercial banks’ mandatory reserves held with the Bank of Mozambique stood at 236,578 million meticais (€3.204 billion) in April, representing a 30.6% increase in a single month. The volume of these reserves had reached a peak of 259,197 million meticais (€3.509 billion) in December 2025, before falling to 225,305 million meticais (€3.050 billion) in January this year and then gradually increasing again until March. After the decline recorded in April, mandatory reserves surged in May following the entry into force of the latest increase in reserve requirements decided by the central bank.

Commercial banks’ mandatory reserve requirements were set by the Bank of Mozambique at 10.5% for liabilities in national currency and 11% for liabilities in foreign currency at the beginning of January 2023. During the first six months of that year, the reserve ratios were increased twice to “absorb excess liquidity in the banking system, with the potential to generate inflationary pressure”, the central bank explained at the time. The last of these increases took place in June 2023, when the ratios reached historic levels of 39% for liabilities in national currency and 39.5% for liabilities in foreign currency.

Since the end of December 2022, when mandatory reserves stood at 62.1 billion meticais (€836 million), the volume of funds immobilised at the central bank had increased by almost 400% by the end of 2024. Amid foreign currency shortages in the domestic market, Mozambican businesses had been insisting since 2024 on the need for the central bank to ease mandatory reserve requirements, particularly those applied to foreign currency deposits. That decision came on 27 January 2025, when the Monetary Policy Committee (CPMO) of the Bank of Mozambique decided to reduce reserve requirements to 29% for national currency and 29.5% for foreign currency.

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However, on 25 May, the CPMO decided to maintain the mandatory reserve ratio for foreign currency liabilities at 29.5%, while increasing the ratio applied to national currency liabilities from 29% to 39%. Bank of Mozambique Governor Rogério Zandamela explained at the time that the measure aimed to “absorb excess liquidity in the banking system, which could generate greater inflationary pressure”, amid risks of rising prices linked to the fuel crisis and the conflict in the Middle East.

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