Angola’s Kwanza depreciates 3.1% due to the fall in amount of foreign currency

Angola’s currency Kwanza depreciated 3.1% last Friday (12th), due to the drop in the amounts of currency made available to the market, breaking a period of apparent stability, ANGOP has learned.

Angolan currency had been under pressure for some time, and the situation is visible in some movements in the unofficial market, with the “spread” (buying and selling difference) widening in the exchange of dollars, but also euros, states BFA bank on its publication.

The source highlights that the inflow of foreign currency into the country has been lower, mainly due to the decrease in export earnings.

The publication stresses the first quarter of 2023 as a reference, in which exports of goods will have totaled US$8.3 billion, a drop of 11.1% compared to USD 9.4 billion in the fourth quarter of 2022.

As for imports of goods, adds the bank, the drop in the same period was 10.7%, to USD 4.1 billion, which would not point to the current imbalance.

Still, the BFA publication mentions the drop in the sale of currency to the private economy, in a greater amount due to the decrease in the provision of foreign currency by the Treasury, which generally provides more than 25% of foreign currency to the market.

The inflows of currency in April and May of this year have been falling with greater intensity due to the drop in the price of oil, which is another factor of imbalance in the market.

According to the document, there is also an expectation that the Kwanza will stabilise at a level closer to USD/AOA 540/550, at the end of the year.

Year-on-year inflation in April stood at 10.6%, a fall of just 0.2 percentage points (pp) compared to March, signaling the fifteenth consecutive month of decline, thus remaining at 0.9 % for consecutive months.

Source: Angola Press News Agency (APNA)