Angola reduces expenses involving foreign currency

12 May 2015

The government of Angola will limit its expenditure involving foreign currency, as the fall in oil prices is reducing state revenues, said Monday in Luanda the Governor of the National Bank of Angola, cited by Angolan news agency Angop.

José Pedro de Morais, who was speaking at the closing session of the First National Investment Forum on Public Debt, said that given the shortage of foreign currency authorities will “rationalise the use of dollars until the revenues generated from oil exports get back on the rails.”

The governor of the central bank said that 70 percent of public expenditure was supported by oil revenues and that “the dollar has become more difficult to acquire because oil prices have fallen by 43 percent since June 2014,” which is contributing to the devaluation the national currency, the kwanza.

The legislative package approved in 2012 which forced oil companies to make payments to suppliers and salaries in Angolan currency, contributed further to reducing the supply of dollars in some sectors of the economy.

Last February Angola’s foreign reserves amounted to US$26.2 billion, according to figures from the National Bank of Angola.

However, the central bank reduced foreign currency sales to Angolan commercial banks by 3.2 percent in the week of 4-8 ​​May to US$300 million, against 310 million the previous week.

In April, the injection of foreign currency by the BNA was around (up to) US$310 million a week, but there are continuing difficulties for businesses and consumers in accessing foreign currency at commercial banks.

Each dollar bill is currently exchanged in the streets of Luanda for more than 150 kwanzas, against an average rate in the interbank market of 110.047 kwanzas per dollar, and some companies are scaling back their activities due to a lack of foreign currency to import the raw materials they need. (macauhub/AO)