New foreign exchange regime for the oil sector in Angola starts having a positive impact

11 November 2013

The new foreign exchange regime for the oil sector, in place in Angola since June, has started having a “positive” impact on the national financial sector, the chief executive of Angolan bank Banco Angolano de Investimentos (BAI) João Fonseca said in Luanda.

In the last four months there has been a “significant increase in liquidity in the banking system,” and Angolan financial institutions are able to provide loans to the economy, despite the banks remaining cautious in granting loans, said Fonseca during a seminar on transforming oil and gas.

The chief executive also said that the process of replacing the US dollar with Angola’s currency within the economy has been on the increase, with greater effect in loans provided by banks in foreign currency.

“Credit in foreign currency has fallen from 64 percent in 2010 to 40.2 percent in September 2013, which means that the Angolan currency is replacing the US currency,” said the BAI chief executive, cited by state newspaper Jornal de Angola.

Noting that since the law had been put in place there had been 11 percent growth in total deposits, mainly driven by deposits in Angolan currency, Fonseca added that exchange rate volatility was no longer an issue.

“The exchange rate is no longer fixed, but there is a certain balance, which is normal in any developed economy,” said the BAI chief executive. (macauhub)