Excess US$ and national reconstruction behind strong Angolan currency – Angolan central bank

23 May 2007

Luanda, Angola, 23 May – The governor of the Angolan central bank (BNA) has said that recent rise in the value of the Angolan kwanza was due to an excess of US dollars in circulation because of oil and investment in national reconstruction.

“This increased value of the kwanza is due to the structural situation of our economy associated to economic climate factors. We have an economy that is extremely dependent on oil export revenues and taxes,” said Amadeu Maurício.

“At the moment we have a climate that determines the country has high expenditure, due to reconstruction in a post-war phase and which has defined the guidelines for reconstruction of the country and its development,” he added.

with Angola’s inflation target for this year set at “10 percent,” the government had to act in the market because of the structural problems of the Angolan economy, in which prices do not vary as much as the authorities would like and “due to that inflexibility,” prices end up being affected by the foreign exchange rate.

In relation to criticisms that the increased value of the kwanza could affect Angola’s emerging industry, Maurício said he believed the opposite was true.

“At the moment, I believe that national industry will benefit and it will become more competitive,” said the governor.

With the valuation of the Angolan currency imported goods have become cheaper, and the governor said that this effect is beneficial for Angolan businesses. (macauhub)