As we previously warned, Mozambique continues on course for default on its national debt; furthermore, following revelations of hidden costs, VTB Bank (IMF) has suspended its emergency aid to Mozambique. Mozambique has missed a deadline for a scheduled repayment on the $535m loan arranged by Russia’s the International Monetary Fund, but without international aid Mozambique will not be able to do anything; to avoid further escalation, the country needs to focus on stabilising the currency, curb inflation, and repair lost trust with financial institutions. Credit Suisse and VTB are now being investigated by financial watchdogs over the heavy undisclosed sovereign borrowing; both banks have been very active in the country, arranging loans for state-owned firms as well as helping with a eurobond issue. Mozambique is under huge stress due to collapsed commodity prices and worldwide economic uncertainty, as well as an acute downturn in its construction and real estate industries, which were driving the nation's boom.
As we previously warned, Mozambique continues on course for default on its national debt; furthermore, following revelations of hidden costs, the International Monetary Fund (IMF) has suspended its emergency aid to Mozambique. Mozambique has missed a deadline for a scheduled repayment on the $535m loan arranged by Russia’s VTB Bank, but without international aid Mozambique will not be able to do anything; to avoid further escalation, the country needs to focus on stabilising the currency, curb inflation, and repair lost trust with financial institutions. Credit Suisse and VTB are now being investigated by financial watchdogs over the heavy undisclosed sovereign borrowing; both banks have been very active in the country, arranging loans for state-owned firms as well as helping with a eurobond issue. Mozambique is under huge stress due to collapsed commodity prices and worldwide economic uncertainty, as well as an acute downturn in its construction and real estate industries, which were driving the nation's boom.