The Monetary Policy Commission of the National Bank of Angola defined the maximum and minimum limits of the foreign exchange band for the fluctuation of the kwanza against the main global currencies, during a special session held on Thursday in Luanda, the central bank said in a statement.
The statement said the limits of the exchange rate band were defined after an analysis of the behaviour of the macroeconomic fundamentals of the Angolan economy, and particularly of the trend of decreasing international reserves, also taking into account the current imbalance between supply and demand for foreign exchange.
Angola’s exchange rate regime, hitherto based on an administrative rate established by the central bank, will now allow for the fluctuation of the exchange rate within a pre-established range, called the exchange rate band.
The kwanza exchange rate in relation to other currencies, namely the dollar and the euro, is now determined by the transactions that take place at currency auctions in the primary market, and is calculated by the weighted average of sales to commercial banks.
This measure, outlined by the governor of the National Bank of Angola during the presentation session of the Macroeconomic Stabilisation Programme for 2018, is intended to reduce the gap between the official and the black market exchange rates, with the former being 166 kwanzas per dollar and the latter around 430 kwanzas per dollar. (macauhub)