Wednesday, February 28, 2018

Angola holds rate again after switch to floating FX regime

     Angola's central bank left its benchmark BNA rate at 18.0 percent, noting the exchange rate of the euro and U.S. dollar had appreciated by 39.50 percent and 24.88 percent, respectively, against the kwanza during foreign exchange auctions in January.
      The National Bank of Angola (BNA), which in January replaced its fixed exchange rate regime with a floating exchange system with bands, said the average exchange rate of the euro at the end of January was 257.39 to the kwanza compared with 184.50 at the end of 2017.
      Compared with the dollar, the kwanza's rate was 207.21 end-January, down from 165.92 at the end of 2017, the fixed rate the BNA had used since 2016.
      After switching its exchange rate regime on Jan. 4, the BNA on Jan. 9 conducted its first auction of foreign exchange under its new system to help determine a reference rate based on actual demand.
      Today's meeting by the BNA's monetary policy meeting is the second following the adoption of the new exchange rate regime. At its policy meeting on Jan. 29, the BNA also maintained its rate after raising it by 200 basis points in November 2017.
       The sale of US$945 million to commercial banks, for the purpose of maintaining the supply of consumer goods, led to a 1.51 percent decline in Gross Reserves  US$17.717 billion, enough for 7.37 months of imports.
       In the credit market, BNA said credit in kwanza rose 0.49 percent but on an annual basis credit contracted by 12.65 percent.
       A decline in the value of exports in January from the non-oil sector lead to a 5.39 percent drop in exports from December while imports fell by 3.0 percent. But year-on-year the trade balance rose by 47.24 percent due to a 19.5 percent increase in exports and a16.3 percent fall in imports.
       Angola's inflation rate eased to 22.72 percent in January from 23.67 percent in December.


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