Angola's Depleting FX Reserves Led to Currency Easing - Central Bank
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 US 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 US$38 billion, finance minister Archer Mangueira said on Wednesday.
The central bank said in a statement on Thursday that its decision to ease currency controls came after it had analysed the "macro-economic 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 US$14 billion. Oil accounts for around 90% of Angola's government revenue, and years of depressed crude prices have hammered once - booming economic growth and eroded foreign currency reserves.
Source: All Africa