## An Assessment of External Price Competitiveness for Mozambique

_IMF Working Papers, August 1, 2009_

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## Bibliographic details
- Authors: Francis Vitek
- Published: August 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451873122.001

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### Summary and key finding
- This paper conducts an assessment of external price competitiveness for Mozambique.
- A variety of indicators suggest that Mozambique has recently lost external price competitiveness with respect to its major trading partners.
- An exchange rate assessment indicates that the metical is overvalued by 26 to 41 percent in real effective terms.
- If sustained, an overvaluation of this magnitude has the potential to retard economic growth and jeopardize external stability, calling for an adjustment of monetary policy to gradually restore external price competitiveness.

### Exchange rate assessment
- The metical is assessed as overvalued by 26 to 41 percent in real effective terms.
- Loss of external price competitiveness is supported by a variety of indicators (unspecified individual indicators are referenced collectively in the source).

### Policy implications and recommendations
- An overvaluation of the metical of the magnitude indicated has the potential to:
  - Retard economic growth.
  - Jeopardize external stability.
- The paper calls for an adjustment of monetary policy to gradually restore external price competitiveness.

### Subject and keywords
- Subject: Current account balance, Global competitiveness, Nominal effective exchange rate, Real effective exchange rates, Real exchange rates
- Keywords: competitiveness, current account, price competitiveness, value, WP

*Source: An Assessment of External Price Competitiveness for Mozambique (IMF Working Paper No. 2009/165).*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/an-assessment-of-external-price-competitiveness-for-mozambique-23164_