LIMITS SET ON CREDIT/DEBIT CARD SPENDING

The Bank of Mozambique on Monday fixed an annual limit of 700,000 meticais (13,160 US dollars, at current exchange rates) for payments abroad using a credit or debit card issued by a Mozambican bank.On 30 November, the governor of the central bank, Ernesto Gove, had warned that large sums of money were leaving the country due to the unrestrained use of bank cards abroad, and that this type of spending has risen dramatically. Three years ago the use of bank cards abroad drained the country of around 300 million US dollars a year, but today the figure is 800 million dollars a year. The owner of one card (whom Gove did not name) used it for purchases abroad in one year in excess of two million dollars.Gove said the point of using credit and debit cards abroad was to pay for such things as holiday, health and education expenses, but not to make commercial imports, for which there exist normal mechanisms controlled by the central bank. The Bank of Mozambique feared that uncontrolled credit and debit card spending abroad was one of the factors contributing to the recent sharp depreciation of the metical.The 700,000 meticais annual limit will come into force on 1 January. Bank clients will not be able to evade the limit by multiplying the number of cards they hold in one or more banks. The limit is per person, not per card.Exceptions can be made, but the client must make a case to his bank as to why he should be allowed to exceed the limit, and all such exceptions must be authorized by the Bank of Mozambique.All banks must obtain an undertaking from each of their card holders that they will not exceed the limit. The banks may establish lower limits for clients on a case by case basis – as is already the case with credit cards. In setting those limits, the banks should take into account the risk profile of each of their clients and legislation on money laundering and the financing of terrorism.The Bank of Mozambique also denied a report appearing in some of the media that it has ordered the automatic conversion of foreign currency accounts into meticais. There was no such instruction, the Bank said, and all exchange measures taken were based on the exchange legislation (which does not prohibit the holding of accounts in foreign currency).There are, however, restrictions on foreign currency accounts, and on 30 November Gove promised that these would be enforced. Under the law exporters who are paid in foreign currency can only keep 50 per cent of it in foreign currency accounts. The central bank’s statement assured the public that “the markets are continuing to operate normally, and the authorities are making every effort to ensure macro-economic stability”.