Country Report Angola March 2011

Outlook for 2011-15: Monetary policy

The Banco Nacional de Angola (BNA, the central bank) is undergoing major reform and restructuring. A new department has been created to support and mitigate the management of liquidity, exchange-rate and operational risk in the banking sector. Efforts are also being made to reduce the sector's dependence on foreign exchange, with the amended Foreign Exchange Law, which requires domestic banks to hold a minimum of 80% of their capital in kwanzas by the end of 2012. In addition, foreign oil companies will be required to use Angolan bank accounts to pay their sub-contractors in Angola, which has the potential to inject billions of dollars into the banking system. With the level of foreign-exchange reserves continuing to recover, the BNA is likely to continue with its policy of intervening in the foreign-exchange markets to keep the kwanza stable (which has kept down the cost of imports). However, the central bank governor, José Massano, has promised to implement extensive monetary and exchange-rate reforms, following on from his decision in November to cut the BNA's rediscount and overnight rates from 30% to 25% and from 21.9% to 18% respectively-the first such cut in years.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
IMPRINT TERMS OF USE