Angola’s depleting FX reserves led to currency easing: central bank

0
344

LUANDA (Reuters) – Angola’s depleting foreign exchange reserves prompted the central bank to ease currency controls, the regulator said on Thursday, a day after plans were unveiled to restructure foreign debt and allow looser trading of the kwanza.

The central bank said on Wednesday it would shift from a currency peg to a trading band, which would keep the kwanza’s value against the U.S. dollar within an as-yet undefined range. The changes will be implemented from this month.

Angola, sub-Saharan Africa’s third largest economy, also plans to refinance its external debt, which stands at $38 billion, Finance Minister Archer Mangueira said on Wednesday.

The central bank said in a statement on Thursday its decision to ease currency controls came after it had analysed the “macroeconomic fundamentals of the Angolan economy, and particularly the decreasing trend of international reserves”.

Angola, Africa’s second biggest oil exporter, has maintained a quasi-pegged exchange rate of about 166 kwanza per dollar, even though the dollar buys about 400 kwanza on a thriving black market.

The central bank has been trying to defend the currency using foreign exchange reserves, but reserves have more than halved since 2013 to about $14 billion.

Oil accounts for around 90 percent of Angola’s government revenue and years of depressed crude prices have hammered once booming economic growth and eroded foreign currency reserves.

Reporting by Tiisetso Motsoeneng; Writing by Joe Brock; Editing by Catherine Evans

SHARE
Previous articleZimbabwe court dismisses case of U.S. woman charged with insulting Mugabe
Next articleSouth Africa’s private-sector activity slows to 20-month low in December
Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.