5000 Meticais – Mozambique

In 1998, Mozambique was in the early stages of a fragile economic recovery following decades of civil war that ended in 1992. The country was implementing a rigorous Structural Adjustment Programme (SAP) under the guidance of the International Monetary Fund (IMF) and World Bank. A central pillar of this programme was monetary reform, which led to the introduction of a new currency, the metical (MZM), in July 1998, replacing the metical that had been heavily devalued by hyperinflation during the conflict. This redenomination, at a rate of 1 new metical to 1000 old meticais, was a technical measure aimed at restoring public confidence in the national currency and simplifying financial transactions.

The macroeconomic context remained challenging. While inflation had been reduced from wartime highs of over 50% to approximately 2% in 1998—a remarkable achievement—the economy was still vulnerable. The new metical was intended to anchor this stability, but the country's monetary policy was tightly constrained by its dependence on foreign aid and the need to maintain a crawling peg exchange rate system to control inflation. The Central Bank's primary focus was on maintaining strict fiscal discipline and building foreign exchange reserves, with the success of the new currency heavily reliant on continued donor support and political stability.

Overall, the 1998 currency reform symbolized Mozambique's commitment to economic normalization and integration into the global financial system. It was a logistical and symbolic step forward, yet the underlying economy remained underdeveloped and heavily reliant on agriculture. The long-term stability of the new metical was not yet assured, as it depended on sustaining difficult reforms, attracting foreign investment, and translating macroeconomic gains into tangible improvements in living standards for a population still grappling with widespread poverty.