Notice No. 3/GGBM/2005 of May 20 - Valuation Exchange Rate

1 NOTICE No. 3/GGBM/2005 SUBJECT: Valuation Exchange Rate Given the need to update the criteria for determining the valuation exchange rate used by Credit Institutions and Financial Companies in the conversion into national currency of their assets and liabilities expressed in foreign currency, the Bank of Mozambique, exercising the competence conferred upon it by Article 71 of Law No. 15/99 of November 1, the Law on Credit Institutions and Financial Companies, determines:

ARTICLE 1 (Observance of the valuation exchange rate) Credit institutions and financial companies shall use the valuation exchange rate fixed by the Bank of Mozambique in the conversion, into national currency, of the value of their assets and liabilities expressed in foreign currency.

ARTICLE 2 (Calculation Methodology)

1. The valuation exchange rate of the North American Dollar (USD) against the metical is obtained through the following algorithm: a) By calculating the simple averages of the buying and selling exchange rates, resulting from: i. weighted average exchange rates of operations carried out between commercial banks; ii. weighted average exchange rates of operations carried out between commercial banks and the Bank of Mozambique; and iii. weighted average exchange rates of operations carried out between commercial banks and their clients.

2 b) By taking the semi-sum of the buying and selling exchange rates obtained under the terms of the previous subparagraph. 2. Regarding other foreign currencies against the metical, the exchange rates made available by REUTERS at 15:00 hours on each business day against the USD shall be used, to which the valuation exchange rate shall be applied; 3. The value of gold is determined by the daily average quotation, in USD, on the London market, to which the valuation exchange rate shall be applied.

ARTICLE 3 (Sending of information and disclosure)

1. Commercial banks shall send daily, by 9:00 hours, information on all spot foreign currency buying and selling operations carried out with the public on the business day prior to the reporting day.
2. The Bank of Mozambique shall determine and disclose the valuation exchange rate by 15:30 hours on each business day.

ARTICLE 4 (Entry into force and revocation) This Notice enters into force on May 27, 2005, revoking all provisions that contradict it.

ARTICLE 5 (Clarification of doubts) Doubts arising from the interpretation and application of this Notice shall be submitted to the Banking Supervision Department of the Bank of Mozambique, which shall issue the instructions deemed necessary for its correct execution.

Maputo, May 20, 2005 Adriano Afonso Maleiane GOVERNOR