Mozambique: Circulating cash declines for second consecutive month after December peak

Physical money in circulation in Mozambique fell to 67,596 million meticais (€902 million) in February, marking a second consecutive monthly decline, according to official data. According to statistics from the Bank of Mozambique, money in circulation had reached a record high of 74,937 million meticais (€1,000 million) in December, with consecutive monthly increases since September. However, in January, money in circulation fell to 69,041 million meticais (€902 million), followed by this further decline in February.

The withdrawal of money from circulation is a common practice in contractionary monetary policy, aimed at reducing the money supply, and is typically used by central banks to curb price increases. Over the course of one year, money in circulation in Mozambique (broad monetary aggregate M3) increased by almost 2%, according to historical data from the central bank, following the introduction of a new series of the metical on 16 June 2024. Prices in Mozambique rose by 3.23% in 2025, according to earlier data released by the National Institute of Statistics (INE), below the level recorded in the previous year.

Mozambique recorded as many as eight monthly declines (deflation) in the consumer price index in less than a year and a half, four of which occurred between April and July 2024, before returning to increases from August onwards. Annual inflation in 2024, according to earlier INE data, stood at 4.15%, below the 5.3% recorded in 2023, and also below the peak of nearly 13% reached in July 2022. The government projected inflation of around 7% for 2025 in Mozambique, the same estimate also made for 2026.