Maputo, Oct. 28, 2024 (Lusa) - Official figures show that Mozambique sold 2.564 billion meticais (€37.1 million) last week in an internal stock market issue of five-year Treasury Bonds.
According to information from the Mozambique Stock Exchange, the operation was concluded on 23 October and the bids submitted by the Specialised Treasury Bond Operators indicate that the issue had a demand of 68.03%.
This treasury bond issue, the 12th series of 2024, for direct subscription by Specialised Operators, authorised the placement of up to 3,916 million meticais (€56.7 million), a figure that was not reached, unlike the previous one.
The operation closed with a fixed yield of 14.50% for the first four half-yearly interest payments and a variable yield for the last six.
In the 11th series of these issues, which took place on 7 October, 5,727 million meticais (€82 million) were placed in a five-year-maturity domestic Treasury Bond issue.
This month the Bank of Mozambique recognised the high pressure caused by the state's internal indebtedness, which had already grown by 90.3 billion meticais (€1.269 billion) by 2024.
‘The pressure on domestic public debt remains high. Domestic public debt, excluding loan and lease contracts and outstanding liabilities, stands at 402.7 billion meticais’ (€5.659 billion), said the information released after the ordinary meeting of the Monetary Policy Committee (CPMO) on 30 September.
The domestic public debt issued by Mozambique had reached 364,251 million meticais (€5.117 billion) in May, after growing by the equivalent of €730 million in five months of 2024, according to previous data from the central bank.
In April, the Mozambican Ministry of Economy and Finance's 2023 public debt report warned of the pace of growth in domestic debt, which, if it continues, threatens the sustainability of public debt.
As interest rates on Treasury Bills (BT, short maturities) and Treasury Operations (OT, longer maturities) ‘have increased, the cost of domestic financing has been driving a continuous upward adjustment of the weighted average interest rate of the government's loan portfolio’.
The rate went from ‘5% in 2021 to 5.8% in 2022 and now 6.5% in 2023, making a cumulative increase of 150 basis points in two years’, said the report, which also warned that the ‘refinancing risk, reflected in the growing concentration of maturities’ of public debt ‘in the short-term horizon, represents the greatest vulnerability’.
The accumulated domestic debt up to 31 December 2023 amounted to $4.91 billion (€4.616 billion). The weight of T-bill issues in total debt rose from 4% in 2019 to 9% in 2023, while that of bonds doubled to 16% in the same period.
PVJ/ADB // ADB.
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