Mozambique’s currency, metical plunged 10 percent on Wednesday to a record low of 66 against the dollar as an International Monetary Fund (IMF) team arrived to try to find a solution to a debt crisis crippling one of the world’s poorest countries.
Mozambique's currency plummets amid visit by IMF
IMF Team in Mozambique to Assess Debt Situation: Official – Bloomberg https://t.co/ng1BHGT8gl— Mozambique tours (@Mozambique_tour) June 15, 2016
Prime Minister says #IMF mission crucial to restoring confidence #Mozambique https://t.co/5PQSayUdqP pic.twitter.com/Omb8tEDWIj— Club of Mozambique (@clubOmozambique) June 15, 2016
Regional diplomats however said they were not optimistic about the chances of success for the June 16-24 IMF mission.
The southern African nation has been facing a deepening economic crisis after the IMF suspended funding to Maputo following the discovery of more than $1bn in previously undisclosed government debt.
The hidden loans follow a state-backed $850m bond issued to set up a tuna company.
The scandal has heaped pressure on Mozambique, which is dependent on donors to finance about a quarter of its budget.
IMF cancelled a visit to Maputo in April after it said that Mozambican authorities had confirmed the existence of the previously undisclosed borrowing — that was secured in 2013 and 2014 — and said the fund was suspending disbursements of $165m of a $286m emergency loan it agreed with the government in October.