africa Angola Banking Currency Economy Finance oil

Bank of Angola to stop buying currency from oil companies

The National Bank of Angola from 2 January 2020 will stop purchasing foreign currency from oil companies operating in the country and will pass this duty on to commercial banks, the governor of the central bank said on Friday in Luanda.

José de Lima Massano, who was speaking at a press conference following the meeting of the Monetary Policy Commission (CPM), said the intention is to pass these operations on to commercial banks, allowing for a more direct relationship with oil companies, ending a scheme set up in 2014 and through which the central bank bought more than US$240 million every month.

“The BNA has no vocation, and it is not its mission, to intervene daily in the foreign exchange market by selling or buying currencies. We have to let the market do its job,” admitted the governor, quoted by the Angop news agency.

Alongside this decision, the BNA reduced the banks’ foreign exchange position limit from 5% of its own funds to 2.5%, so that the currency to be acquired by commercial banks is not retained by them.

At the moment, up to 5% of own funds or the equivalent may be currency retained within the respective banks, i.e. the bank may buy currency and not sell the equivalent of up to 5% of its own funds.

“Banks will be more active in the forex market, which will help accelerate the discovery of the fair price and find the currency balance in our economy,” noted Lima Massano.

Source: Macauhub

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