Lubango – The slight change in the exchange rate that occurred in the last week of May with the Angolan currency (Kwanza) losing some ground to the main currencies does not mean a depreciation, but it is justified by the floating exchange rate regime in force, the Governor of the Central Bank of Angola (BNA), José de Lima Massano said Tuesday.
Speaking in a press conference in the southern Huila Province, following a meeting of the Monetary Policy Committee (CPM) of the BNA, the governor said in April, the exchange rate stood at USD/AOA 405.62 against USD/AOA 446.44 of the previous month, which represented a monthly appreciation of 10.06 percent and accumulated 36.8 percent in the year.
José Massano said the Monetary Base in national currency remained stable in April, but contracted by 6.39%, in homologous terms, adding that the monetary aggregate in national currency expanded by 4.97% in the month of April and 16.23% in homologous terms.
The BNA governor explained that this was not a depreciation, having admitted certain pressure resulting from demand, however not caused by supply, since the BNA sold one billion dollars to the banks in May.
“We have registered, yes, in recent weeks and throughout May, a certain pressure, but nothing that can be understood as a depreciation of the Kwanza, because until April we had an appreciation of the exchange rate of about 36 percent”, he said.
He stressed that the supply of currency has not slowed down either, and that what is happening is a peak in demand, however without sign of a reversal of the picture that has been verified since the beginning of the year.
To reverse the trend, José de Lima Massano advised importers to negotiate a forward exchange rate with commercial banks to avoid last minute requests, which can put pressure on the system.
Home loans start this month
The reduction of the mandatory reserve coefficient in national currency from 22 percent to 17 percent until July, serves for banks to offer with greater security, the housing credit (mortgage) that starts in July, Mr Massano disclosed.
The governor added that despite uncertainties and risks associated with the external economic context and potential impacts on the national economy still in the recovery phase, the current course of monetary policy remains adequate to achieve the inflation target.
Source: Angola Press News Agency