Angola’s central bank devalues kwanza by about 6 pct

Luanda, Angola (Capital Markets in Africa) – Angola’s central bank devalued the kwanza currency by about 6 percent against the dollar, a statement showed, a move analysts said was aimed at stimulating foreign currency inflows eroded by falling global oil prices.

According to the bank’s latest update on the official exchange rate, issued late on Thursday, one U.S. dollar will now cost 116-117 kwanza, compared with 109-111 before.

The exchange rate is however much higher at 185-195 on a thriving informal market.

Plunging oil prices have hit Africa’s second largest crude exporter, forcing the central bank to restrict dollar sales as foreign exchange supplies dried up.

Analysts said the official devaluation would not be sufficient to shore up Angola’s foreign reserves.

“The devaluation of the Angolan kwanza had long seemed inevitable, but we doubt that the Banco Nacional de Angola’s move goes far enough,” Capital Economic’s Africa economist John Ashbourne said in a note.

“Angola is heavily dependent on energy exports, and low oil prices have created unsustainable strains in the country’s balance of payments.”
Source: Reuters Africa Online Report Business News