Angola Banking Economy Finance Government

Bloomberg: Angola Seeks to Narrow Gap of Kwanza Black Market, Official Rate

Angola will take steps to narrow the gap between the kwanza’s official exchange rate and that on the black market, central bank Governor Jose Pedro de Morais said.

The measures will start seeing results next year, de Morais told reporters in Luanda, the capital on Dec. 11. He declined to say whether a devaluation of the currency was an option. The kwanza was unchanged at 135.314 per dollar at 11:23 a.m. local time. The currency trades at about 270 to 280 kwanza per greenback on the black market.

“When we are able to take all measures set forth in this budget, this difference of exchange is surely going to disappear,” he said. It will “certainly include a greater balance between the quantity of money in circulation and the availability of foreign-exchange resources.” he said.

Angola’s central bank has stepped in at least twice this year to devalue the currency as much as 25 percent as the price of oil, its largest source of foreign exchange, plunges to the lowest level since 2008. The International Monetary Fund said on Oct. 27 that there is still room for the gap to narrow and Eurasia Group said last month that the bank will continue to manage a gradual devaluation next year.

The kwanza has dropped 24 percent versus the dollar this year, the worst performer in Africa after Zambia’s kwacha, Mozambique’s metical and Malawi’s kwacha.

Source: Bloomberg

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