President Daniel Chapo of Mozambique faced a setback as the IMF Executive Board rejected his expectations for a new financial program or loan on February 17. Chapo had been relying on this financial support to trigger investment and aid for the country, which has been undergoing economic challenges. The Public's expectation was high for an announcement that would signal economic relief, but the Board's decision indicates a tougher stance from the IMF regarding Mozambique's fiscal policies.

The IMF's November mission had already signaled a stringent approach, insisting on significant devaluation of the local currency along with necessary fiscal and wage reforms. The Executive Board reiterated these demands, emphasizing that achieving credible reform objectives is essential for gaining public trust and support. The IMF highlighted the importance of substantial communication about reform goals to ensure stakeholder buy-in, suggesting ongoing economic uncertainties for the populace without visible reform initiatives.

For the last five years, Mozambique has maintained a fixed exchange rate of $1 to 63.9 MT, but the Board's assertive stance on devaluing the currency underscores the IMF's commitment to fiscal reforms in response to Mozambique's economic conditions. Without adopting these reforms, the prospects of obtaining further financial aid from international institutions remain bleak, indicating continued hardships for the country in the future.