Mozambique has been facing a persistent shortage of foreign currency, with a significant accumulated backlog in external payments, particularly since 2024. However, official data show that, since 2021, the exchange rate has been relatively stable, a state that appears to be both unnatural and unrelated to current market conditions. The foreign exchange shortage and the unnatural stability of the exchange rate may have had negative macro-fiscal effects. These include a decline in economic activity, import restrictions on goods and services, rising prices, worsening fiscal deficits and increased public debt.
In this context, this paper seeks to empirically analyse the relevant macro-fiscal impacts associated with persistent foreign exchange shortage and the exchange rate, using Mozambique as a case study. More specifically, this study determines the trends of its main variables (persistent foreign exchange shortages, the official exchange rate, gross domestic product, goods and services imports, inflation, the fiscal deficit, and overall public debt).
