Mozambique is changing the leadership of its central bank as the country confronts rising inflation, heavy debt pressures and the need to rebuild investor confidence.

President Daniel Chapo on Tuesday appointed economist Felisberto Dinis Navalha as governor of the Bank of Mozambique, reversing an appointment made a day earlier.

The presidency withdrew the appointment of Waldemar Fernando de Sousa as governor and Navalha as deputy governor, replacing them with Navalha as governor and Benedita Manuel Guimino as deputy governor.

The sudden change puts new leadership at the center of Mozambique’s efforts to manage economic pressures and strengthen financial stability. The presidency did not explain why it reversed the earlier appointments.

Navalha will succeed Rogerio Zandamela, whose second and final five-year term ended Monday.

He is expected to be sworn in Wednesday, while the presidency said a date for Guimino’s swearing-in will be announced later.

Navalha takes over at a critical time

The new governor will inherit an economy where inflation, borrowing costs and public debt remain important concerns for businesses and investors.

His appointment also comes as Mozambique seeks to improve confidence in its economy and maintain stability in the financial system.

The presidency gave no further details on why it reversed the appointments within a day. It also did not immediately respond to a request for comment, leaving the reason for the change unclear.

Mozambique’s debt challenges

Mozambique’s debt problems have deep roots. The country was hit by a hidden-debt scandal in 2016 after the discovery of undisclosed loans, a crisis that damaged investor confidence and restricted access to international financing.

The fallout placed additional pressure on government finances and complicated efforts to attract investment.

The central bank will therefore have an important role as Mozambique manages inflation and seeks greater financial stability.

Bank of Mozambique’s role

The Bank of Mozambique is the country’s central bank and is responsible for monetary policy and financial stability.

Its decisions affect interest rates, inflation, the banking sector and the wider economy.

Navalha now takes charge of the institution at a sensitive point for Mozambique’s economy.

Investors and businesses will be watching his early policy decisions closely as the government deals with debt pressures and seeks to strengthen confidence in the country’s financial system.