Money is weird. Especially when you're looking at a currency like the Mozambican metical, which has essentially spent the last four years frozen in time against the US dollar. If you’ve looked at a chart for USD to Mozambican Metical lately, you might think your screen is broken. It’s a flat line. Since 2021, the rate has hovered stubbornly around 63.8 or 63.9 meticais per dollar.
But don't let that boring line fool you. Underneath that surface, there is a lot of grinding and structural stress. Honestly, the "official" stability is starting to look more like a lid on a boiling pot.
The 64 Metical Myth
For years, the Banco de Moçambique has kept the metical on a remarkably tight leash. While other African currencies like the Nigerian naira or the Angolan kwanza were busy falling off cliffs, the metical stood its ground.
How? Well, the central bank basically manages it. They use their foreign exchange reserves—which were sitting around $3.9 billion in mid-2025—to smooth out any ripples. It makes life predictable for importers in Maputo or Beira. But it also creates a massive disconnect.
Right now, there is a shortage of dollars in the country. It’s a classic squeeze. When the central bank keeps the price of dollars "cheap" (around 64 meticais), everyone wants them, but the supply isn't always there. If you’re a business owner in Mozambique trying to pay a supplier in Dubai or Lisbon, you might find that your bank simply doesn't have the greenbacks to give you at the official rate.
Why things are changing in 2026
The "boring" days of the 64-metical peg might be numbered. In early January 2026, we’ve already seen a slight tick upward to $63.91$. That sounds tiny. It’s not. It’s a signal.
Oxford Economics recently dropped a bit of a bombshell, forecasting a gradual devaluation of the metical throughout 2026. They aren't just being pessimistic for the sake of it. The math is getting hard to ignore. Mozambique is currently negotiating a new financing deal with the International Monetary Fund (IMF).
The IMF usually hates "artificial" exchange rates. They see an overvalued currency as a tax on exports and a subsidy for imports that the country can't afford. There is a very real chance that a "correction"—a polite word for a drop in value—will be a mandatory condition for Mozambique to get that IMF cash.
The Parallel Market Reality
When the official rate stays still while the economy struggles, a "shadow" or parallel market always pops up. You’ve probably seen this if you’ve actually travelled to the region. While the bank tells you $1 is worth 64 MZN, the guy on the street or the informal broker might be asking for 70 or 72.
By late 2025, that parallel market premium had climbed to nearly 10%. That is a huge gap. It means the "real" value of the metical is already lower than what the official charts say. Eventually, these two numbers usually have to meet.
The Gas Factor: A Double-Edged Sword
Everyone talks about the gas. It’s the "Great Hope" for the Mozambican economy. We are talking about 180 trillion cubic feet of natural gas in the Rovuma Basin. That is a staggering amount of energy.
But here is the catch: most of that money isn't here yet.
TotalEnergies’ massive $20 billion LNG project was paused for a long time due to security issues in Cabo Delgado. While they are finally ramping back up, and ExxonMobil is eyeing a 2026 restart for its infrastructure, the actual flood of dollar revenue from gas exports won't hit full speed until closer to 2028 or 2029.
Until then, Mozambique has to pay for the massive imports needed to build these projects. You need steel, tech, and specialized labor—all paid for in US dollars. This puts even more pressure on the USD to Mozambican Metical exchange rate in the short term.
Inflation and Your Wallet
The central bank has been surprisingly aggressive with interest rates. They’ve been cutting the MIMO rate (the benchmark) fairly consistently, recently dropping it to 9.50%.
They are trying to stimulate a domestic economy that took a hit after the 2024 post-election protests. But cutting rates usually makes a currency weaker. If Mozambique keeps cutting rates while the US Federal Reserve keeps theirs relatively high, investors will naturally move their money toward the dollar.
- Official Inflation: Hovering around 4% to 5%.
- Fiscal Pressure: The government is struggling with a large wage bill and domestic debt.
- Default Risk: S&P Global recently kept Mozambique’s local currency rating at "Selective Default" because of payment delays on treasury bonds.
That last point is a big deal. If the government is struggling to pay its own domestic bills in meticais, it makes holding the currency a lot scarier for big institutional investors.
Real-World Impact: What this means for you
If you’re sending money home or planning a business venture, don't rely on the "64" number forever.
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- Budget for Slippage: If you are planning a project in late 2026, run your numbers at 68 or 70 meticais to the dollar. It’s better to be pleasantly surprised than broke.
- Watch the IMF: The first quarter of 2026 is critical. If a deal is signed, look for language about "exchange rate flexibility." That’s code for devaluation.
- Local Prices: Even if the exchange rate looks stable, the cost of imported fuel and food will likely rise if the metical is allowed to float.
The metical isn't "weak" in the sense that it's crashing. It's "tense." It’s like a rubber band that has been stretched for four years. At some point, the Banco de Moçambique has to let go of one end. When they do, the move toward 70 or higher could happen fast.
Actionable Next Steps
If you have significant exposure to the metical, prioritize converting excess cash into harder assets or dollars sooner rather than later. For those managing business operations, negotiate contracts with a "currency adjustment clause" that triggers if the rate moves more than 5%. Keep a close eye on the Banco de Moçambique’s January 28 interest rate decision; any further cuts without a boost in reserves will be the clearest signal yet that the 64-level is about to break.