IMF sending team to Mozambique to assess struggling economy

IMF Managing Director Christine Lagarde. (Photo: AFP)

Washington: The International Monetary Fund (IMF) is sending a team to Mozambique at the end of September for an update on the southern African nation's struggling economy, including its progress in accounting for over $2 billion in irregular state loans.

The IMF team will be in Maputo for a week from Sept. 22 to review efforts to stabilise the economy that include cutting spending in the 2016 budget and tightening monetary policy, spokesman Gerry Rice told a news conference in Washington.

"This will also take into account the fact-finding process into the previously undisclosed loans," Rice said.

Relations with the IMF, donors and investors have been badly hurt by the 2013 and 2014 loans, none of which were discussed with donors, approved by parliament or included in official budgets.

Subsequent suspension of donor assistance has contributed to a severe dollar shortage and sent the metical currency down nearly 40 percent against the dollar.

President Filipe Nyusi's appointment on Wednesday of IMF official Rogerio Lucas Zandamela as central bank governor may go some way to patching up ties. Zandamela is currently serving in Djibouti and Somalia.