Regulatory Alerts2021-04-15
Circular No. 02/EMO/2021, of April 15 - Formulas for Calculating Forward Exchange Rates and Interest Rates
The Bank of Mozambique issued Circular No. 02/EMO/2021 to mandate standardized mathematical formulas for calculating forward exchange rates and interest rates for over-the-counter derivatives, specifically FX Forward, FX Swap, Cross-currency Swap, and Forward Rate Agreement instruments. The directive requires financial counterparties to derive spot rates from market quotations, apply internationally published interest rate series, and strictly adhere to prescribed calculation methodologies for periodic interest and settlement amounts. These rules take effect on April 16, 2021, and any interpretive disputes are to be resolved by the Bank's Markets and Reserve Management Department.
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