Money:
Currency, Inflation and Devaluation

Dossier MZ-0516

 

The Portuguese escudo was the currency of colonial Mozambique from 1914 until 1975, and then continued in circulation for another five years after independence. Until 1977, this Mozambican escudo was equal in value to its Portuguese equivalent. Mozambican banknotes were issued by the Banco Nacional Ultramarino, and then by the Banco de Moçambique. Mozambican coins were first introduced in 1935.

The first attempt to introduce a national currency after independence took place in 1975, when the metica was to have been launched. Although notes were printed and coins minted, the currency was never put into circulation. The report posted below from the South African weekly To the Point is racist in tone and trivialises this event; there were certainly sabotage and counterfeiting attempts on quite a large scale, with the objective of damaging the economy. Indeed, the Citizen reported in mid-1980 that the quantity of counterfeit escudos in circulation was one of the precipitating factors for the eventual creation of the metical.

In June 1980, the metical was successfully introduced to replace the escudo, at par. The name of the currency derives from the Arabic word mitqāl [see at left for the word in abjad], from the root taqula, to be heavy, to weigh.

In following years, the country suffered from severe and more or less continuous inflation, with regular devaluations of the metical. By the mid-1980s, this accelerated sharply: in the eighteen months from early 1987 to July 1988, the currency was formally devalued four times, with its value against the US dollar dropping from 40 to one to 580 to one over the period.

Money costs money

Above: “Money costs money” – an advertisement that ran in Tempo magazine in August 1989, urging people to look after banknotes better. The rest of the slogan reads “A torn note is a lost note. Help the country to save foreign exchange”, a reference to the fact that banknotes were printed abroad.

 

Although falling outside the chronological scope of MHN’s coverage, it may be worth noting that on 1 July 2006, Mozambique slashed three zeros from the old metical, redenominating it it at a rate of 1000 old meticais to one new one.

The work of the Belgian economist and ex-CEA cooperante Marc Wuyts is essential reading on the question of money in socialist Mozambique. See especially Money and Planning for Socialist Transition: The Mozambican Experience (Aldershot: Gower, 1989), and ‘Money, planning and rural transformation in Mozambique’ Journal of Development Studies, vol.22 no.1 (1985), pages 180-207 (DOI: 10.1080/00220388508421974, subscription required).

Decoration

MHN Resources

The Escudo, the Metica and the Fight against Forgery, 1975-1980

◊ January 1974
Situação cambial deficitária abordada pela AIM. Indústria de Moçambique vol.7 no.1 (January 1974), p.5-8. Note that AIM here stands for the Associação Industrial de Moçambique. Click here to access a PDF file, size 589 kb.

◊ 4 August 1974
Em Moçambique, quanto vale o rand? Tempo [Maputo], no.202, 4 August 1974, p.17-20. Click here to access a PDF file, size 1.7 Mb.

◊ 7 March 1977
Marcelino Komba. Mozambique pegs her currency to US dollar. Daily News [Dar es Salaam], 7 March 1977. Click here to access a PDF file, size 56 kb.

◊ 11 March 1977
[Counterfeit money produced in Western Europe]. Daily News [Dar es Salaam], 11 March 1977. Click here to access a PDF file, size 65 kb.

 

Design of unissued metica banknotes

Above: a South African magazine published these images of never-issued metica banknotes in 1978. [To the Point vol.7 no.41 (13 October 1978), p.45]. MHN has no idea whether they are authentic or not; images of metica coins, however, may be seen here.

 

◊ 13 March 1977
Escudo moçambicano mantém o seu valor: definida nova base de fixação de câmbios. Tempo no.336, 13 March 1977, page 7. Click here to access a PDF file, size 175 kb.

◊ 23 March 1977
Fake cash plates made in London. Daily News [Dar es Salaam], 23 March 1977. Click here to view or download a PDF file, size 101 Kb.

◊ 24 April 1977
Notas falsas de mil escudos e, circulação. Tempo no.342, 24 April 1977, pages 6-7. Click here to access a PDF file, size 534 kb.

◊ 13 October 1978
José Ramalho. Machel’s metica still in mothballs. To the Point [Johannesburg] vol.7 no.41 (13 October 1978), p.45-46. Click here to view or download a PDF file, size 320 Kb.

◊ 18 May 1980
Notas de mil escudos retiradas da circulação. Tempo [Maputo] no.501, 18 May 1980, p.5.

The Introduction of the Metical, June 1980

◊ 14 June 1980
Samora Moisés Machel. Um instrumento para construir o futuro. Notícias [Maputo], 15 June 1980, pages 1, 6; also reprinted in Criação da moeda nacional: o metical (Maputo: CEDIMO, 16 June 1980)(Doc.Inf. no.7, série A). Speech announcing the creation of the new currency. Item no.414 in the Souto-Sopa bibliography of Machel. Click here to download a PDF file, size 962 kb.

◊ 16 June 1980
Assembleia Popular. Comissão Permanente. Lei no.2/80. Lei sobre a criação do metical. In: Criação da moeda nacional: o metical (Maputo: CEDIMO, 16 June 1980), p.7-11. (Doc.Inf. no.7, série A). Click here to download a PDF file, size 485 kb.

◊ 16 June 1980
Assembleia Popular. Comissão Permanente. Lei no.3/80. Lei sobre a troca de notas. In: Criação da moeda nacional: o metical (Maputo: CEDIMO, 16 June 1980), p.13-17. (Doc.Inf. no.7, série A). Click here to download a PDF file, size 631 kb.

◊ 16 June 1980
Banco de Moçambique. Ministro-Governador. Diploma ministerial: como se processa a troca. In: Criação da moeda nacional: o metical (Maputo: CEDIMO, 16 June 1980), p.19-25. (Doc.Inf. no.7, série A). Click here to download a PDF file, size 1.9 Mb.

◊ 16 June 1980
Aviso importante. Notícias [Maputo] (16 June 1980). Click here to download a PDF file, size 61 kb.

◊ 16 June 1980
Instruções para o preenchimento dos impressos pelas pessoas. In: Criação da moeda nacional: o metical. Maputo: CEDIMO, 16 June 1980. p.27-30. Click here to download a PDF file, size 249 kb. (Doc.Inf. no.7, série A).

◊ 16 June 1980
Perguntas e respostas sobre a criação do metical e a troca de notas: o que é o metical, quanto vale e como se escreve. In: Criação da moeda nacional: o metical. Maputo: CEDIMO,16 June 1980. p.35-40. Click here to download a PDF file, size 1.0 Mb. (Doc.Inf. no.7, série A).

◊ 16 June 1980
Assembleia Popular. Comissão Permanente. Instruções gerais às Assembleias do Povo aos vários níveis. In: Criação da moeda nacional: o metical. Maputo: CEDIMO, 16 June 1980. p.41-42. Click here to download a PDF file, size 339 kb. (Doc.Inf. no.7, série A).

◊ 16 June 1980
Maputo. Comissão Provincial para a Troca de Notas. Postos de troca em Maputo: comunicado da CPTN. In: Criação da moeda nacional: o metical. Maputo: CEDIMO, 16 June 1980. p.47. Click here to download a PDF file, size 363 kb. (Doc.Inf. no.7, série A).

◊ 16 June 1980
Jacinto Veloso. Instruções aos órgãos e membros do Partido. In: Criação da moeda nacional: o metical. Maputo: CEDIMO, 16 June 1980. p.43-45. Click here to download a PDF file, size 363 kb. (Doc.Inf. no.7, série A).

◊ 17 June 1980
Escudo border closure. Citizen [Johannesburg], 17 June 1980. Click here to download a PDF file, size 511 kb.

◊ 17 June 1980
Operação de troca de notas: povo está a valorizar grande conquista patriótica. Sérgio Vieira em entrevista à RM: violadores da lei sobre a troca serão exemplarmente punidos, operações de troca continuam hoje em todo o país. Notícias [Maputo] (17 June 1980). Click here to download a PDF file, size 989 kb. Clipping is incomplete, lacking a second part.

◊ 17 June 1982
Assinalado II aniversário da criação do metical. Notícias [Maputo] (17 June 1982). Click here to download a PDF file, size 216 kb.

◊ 18 June 1980
Currency switch arouses fears. The Star [Johannesburg], 18 June 1980. Click here to download a PDF file, size 569 kb.

◊ 30 June 1980
Forged escudo notes. Citizen [Johannesburg], 30 June 1980. Click here to download a PDF file, size 522 kb.

Decoration

◊ 1983
Museu Nacional da Moeda. Exposição medalhistica. Maputo: o Museu, 1983. z-fold leaflet, two-sided. Click here to download a PDF file, size 475 kb.

◊ 7 August 1984
Países africanos planeiam moeda ligada ao escudo. Correio da Manhã 7 August 1984. Click here to download a PDF file, size 739 Kb.

◊ 16 June 1985
Museu da Moeda comemora 1.º aniversário. Notícias [Maputo], 16 June 1985. Click here to download a PDF file, size 389 Kb.

◊ 15 January 1987
Travar corrida ao crédito fácil. Notícias [Maputo] (15 January 1987). Click here to download a PDF file, size 121 kb.

◊ 11 May 1984
Novo sistema cambial agora em Moçambique: anunciadas medidas de incentivo aos empresários. Notícias [Maputo] (11 May 1984). Click here to download a PDF file, size 191 kb.

◊ 28 August 1987
Situation toujours difficile, malgré les réformes économiques. Marchés Tropicaux et Méditerranéens [Paris] (28 August 1987). Click here to download a PDF file, size 93 kb.

◊ 22 January 1990
[Metical no longer linked to US dollar]. Africa Economic Digest [Exeter] (22 January 1990). Click here to download a PDF file, size 19 kb.

◊ November 1990
Foreign currency operations liberalised. MozambiqueFile [Maputo] (November 1990), p.11. Click here to download a PDF file, size 134 kb.

◊ 3 November 1990
Moçambique liberaliza movimentos cambiais. Expresso [Lisbon] (3 November 1990). Click here to download a PDF file, size 43 kb.

◊ 8 January 1991
Notas de escudos de Moçambique emissão do BNU. O Diabo [Lisbon] (8 January 1991). Click here to download a PDF file, size 29 kb. Reports that the «Associação dos Espoliados de Moçambique» is requesting permission to exchange old Mozambican escudos (presumably smuggled out of the country, and not legal currency since 1980) for Portuguese money.

◊ 8 August 1991
[Chissano’s portrait on banknotes]. Namibian [Windhoek] (8 August 1991). Click here to download a PDF file, size 211 kb.

Devaluations

◊ 3 July 1987
Devaluation follows IMF deal. Africa Economic Digest [London] (3 July 1987). Click here to download a PDF file, size 77 kb.

◊ 7 January 1988
[Devaluation report]. Indian Ocean Newsletter [Paris] (7 January 1988). Click here to download a PDF file, size 464 kb.

◊ 15 January 1988
Monnaie: dévaluation du metical de 12.5 %. Marchés Tropicaux et Méditerranéens [Paris] no.2201 (15 January 1988), p.153. Click here to download a PDF file, size 39 kb.

◊ 29 April 1988
Mozambique. Africa Analysis [London] (29 April 1988). Click here to download a PDF file, size 502 kb.

◊ 8 July 1988
Currency devalued. Africa Economic Digest [Exeter] (8 July 1988), p.14. Click here to download a PDF file, size 200 kb.

◊ 8 July 1988
Finances: dévaluation de 20.8 % du métical. Marchés Tropicaux et Méditerranéens [Paris] (8 July 1988). Click here to download a PDF file, size 31 kb.

◊ 9 July 1988
Mozambique: further devaluation. Indian Ocean Newsletter [Paris] (9 July 1988). Click here to download a PDF file, size 80 kb.

◊ August 1988
Currency devalued. AIM Information Bulletin [Maputo] no.145 (August 1988), p.12. Click here to download a PDF file, size 473 kb.

◊ 17 October 1988
Government devalues metical for fifth time. Foreign Information Broadcast Service [FBIS] [Reston VA] (17 October 1988). Click here to download a PDF file, size 33 kb. Radio Maputo in English.

◊ 22 October 1988
Another devaluation. Indian Ocean Newsletter [Paris] (22 October 1988), p.8. Click here to download a PDF file, size 37 kb.

◊ 24 October 1988
Metical desvalorizado. Século de Joanesburgo [Johannesburg] (24 October 1988). Click here to download a PDF file, size 26 kb.

◊ 2 January 1989
Bank announces metical devalued by 4 percent. Foreign Information Broadcast Service [FBIS] [Reston VA] (2 January 1989). Click here to download a PDF file, size 20 kb. Radio Mozambique in Portuguese.

◊ 13 January 1989
Monnaie: nouvelle dévaluation du métical. Marchés Tropicaux et Méditerranéens [Paris] (13 January 1989). Click here to download a PDF file, size 36 kb.

◊ 8 February 1989
Mozambique [2,8 per cent devaluation]. Africa Economic Digest [Exeter] (8 February 1989). Click here to download a PDF file, size 20 kb.

◊ 6 March 1989
Metical desvalorizado. Século de Joanesburgo [Johannesburg] (6 March 1989). Click here to download a PDF file, size 27 kb.

◊ 10 March 1989
Nouvelle dévaluation. Marchés Tropicaux et Méditerranéens [Paris] (10 March 1989). Click here to download a PDF file, size 26 kb.

◊ 31 March 1989
Mozambique: further devaluation. Africa Research Bulletin [Economic, Financial and Technical Series] [Exeter] (31 March 1989). Click here to download a PDF file, size 478 kb. Reproduces a report dated 28 February 1989.

◊ 4 May 1989
Recent economic changes: monthly currency devaluations. MIO News Review [London] no.153 (4 May 1989). Click here to download a PDF file, size 33 kb.

◊ 3 July 1989
Metical desvalorizado em 1,9 por cento. Notícias [Maputo] (3 July 1989). Click here to download a PDF file, size 43 kb.

◊ 10 July 1989
In brief [metical devalued by 1.9 per cent]. Africa Economic Digest [Exeter] (10 July 1989). Click here to download a PDF file, size 93 kb.

◊ 7 September 1989
Devaluation of metical. Summary of World Broadcasts [London] (7 September 1989). Click here to download a PDF file, size 24 kb. Radio Maputo broadcast in English.

◊ 16 September 1989
Further devaluation. Indian Ocean Newsletter [Paris] (16 September 1989). Click here to download a PDF file, size 30 kb.

◊ 11 December 1989
Mais uma desvalorização do metical. Século de Joanesburgo [Johannesburg] (11 December 1989). Click here to download a PDF file, size 22 kb.

◊ 15 December 1989
Nouvelle dévaluation de la monnaie. Marchés Tropicaux et Méditerranéens [Paris] (15 December 1989). Click here to download a PDF file, size 28 kb.

◊ 17 April 1990
Bank of Mozambique devalues currency. Evening Post [Port Elizabeth] (17 April 1990). Click here to download a PDF file, size 33 kb.

◊ 25 April 1991
Maputo devalues currency. Financial Gazette [Harare] (25 April 1991). Click here to download a PDF file, size 38 kb.

Inflation

◊ March 1986
Paul Fauvet. Inflation hits Mozambican economy. Africa Now [London] (March 1986), p.38. Click here to download a PDF file, size 408 kb.

Average annual exchange rates in FLS

◊ June 1993
Squeezed to the limit. Southern African Economist [Harare] (June 1993), p.10-11. Click here to download a PDF file, size 211 kb.

◊ October 1993
Metical in free fall. Southern African Economist [Harare] (October 1993), p.24-25. Click here to download a PDF file, size 245 kb.

Decoration