Commercial banks must undertake to sell currency at the exchange rate established on the day of the settlement of foreign transactions, as well as to grant credit in kwanzas without indexation, whenever in the settlement of letters of credit, importers do not have enough funds in their account to cover the operation, recalled the National Bank of Angola (BNA).
These procedures were restated to banks in a circular letter (a document that urges compliance with previous standards) from the BNA, issued recently to strengthen mechanisms for the settlement of letters of credit established in notices 11/2014 and 5/2018, as well as by instruction 4/2019.
The document urges banks to sell foreign currency to importers on the settlement date of the foreign liability, regardless of whether they have used their currency position for the settlement of this liability or have purchased currency specifically for this purpose.
The settlement of letters of credit in favour of the exporter, the document said, requires a debit from an importer’s account denominated in national currency, at the exchange rate for the sale of foreign currency in a commercial bank on the date of settlement.
If the importer does not have sufficient funds in their account to cover the settlement, the financial institution must grant a loan in national currency, in the amount of the shortfall recorded in the client’s account in national currency, and this amount may not be indexed to any foreign currency.