March 27, 2018 / 10:26 AM / a month ago

Angola's c.bank governor sees kwanza depreciation tailing off -report

LUANDA, March 27 (Reuters) - Angola’s central bank governor, José Massano, expects the kwanza to depreciate further but more slowly after the currency lost nearly 30 percent of its value so far this year, according to the newspaper O Pais.

Angola’s central bank abandoned its currency peg at the start of the year, shifting to a trading band which would keep the kwanza’s value within a fixed non-disclosed range.

After the kwanza plummeted in value during the first few auctions, the central bank set a limit of a 2 percent fluctuation at each currency auction.

“By the disequilibrium that still exists between supply and demand of foreign exchange, it is expected that we will see further pressures on the depreciation of the national currency,” Massano said in an interview with O Pais.

“This depreciation, however, should gradually become less accentuated, as the market feels the effect of a restrictive monetary policy and gains more visibility and control over access to foreign exchange,” Massano added.

Massano told O Pais that the kwanza was currently trading within the adopted band, but near the lower limit.

Despite kwanza’s depreciation, the street rate for dollars remains nearly double the official rate.

Reporting by Stephen Eisenhammer Editing by Angus MacSwan

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