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Mozambique's currency plummets amid visit by IMF

Mozambique's currency plummets amid visit by IMF

Mozambique

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.

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.