The National Bank of Angola has removed the 2.0% maximum limit on daily foreign exchange auctions, thus allowing the value of the kwanza, the national currency, to vary without any limitations, Bloomberg reported.

The 2.0% cap on the maximum variation was introduced in January 2018, after the first the Angolan currency experienced major losses against the US dollar and the euro in the first two sessions of the new foreign exchange market model.

The news agency also reported that this limit was lifted last September, which resulted in the acceleration of the depreciation of the Angolan currency.

The kwanza has already lost 32% of its value against the dollar since the beginning of the year, with 18% of this loss occurring in October, so each dollar is now worth 453 kwanzas,

Before the new foreign exchange market model came into force, replacing the previous one which had an administratively set exchange rate, the US dollar was worth 167 kwanzas, meaning that it has since lost 63.13% of its value.

Bloomberg also reported that the kwanza’s depreciation quickened after the central bank launched auctions of US$10 million a day on 9 October, when it no longer imposed the 2.0% cap on each auction.

The National Bank of Angola is currently holding an extraordinary meeting of its Monetary Policy Commission, and is expected to change the market’s benchmark interest rate, the BNA rate, to halt the depreciation of the national currency and control the rise in prices. (Macauhub)