Demand for US dollars from the National Bank of Angola fell to half following the introduction of the new Foreign Exchange Law, which requires companies, particularly in the oil sector, to make payments in kwanzas, financial news agency Bloomberg reported.
Citing the deputy governor of the central bank, António André Lopes, the agency said that the National bank of Angola in June sold the equivalent of US$200 million per week, which compares to US$400 million per week in May.
This drop in demand comes at a time when the country is seeking to reduce the role of the dollar in the domestic economy and the introduction of the Foreign Exchange Law, on 1 June, was a step in that direction.
The deputy governor also said there was a high supply of foreign currency, as oil companies are now required to pay in kwanzas, which they buy in exchange for dollars, and noted that the measures that have been introduced were intended to “reduce the role of the dollar in the economy.”
“There is some pressure to transform the kwanza into a traded currency,” said António André Lopes adding that, “we have to think about the impact this decision could have on the economy.” (macauhub)