LUANDA, Oct. 23 (Xinhua) -- The Monetary Policy Committee of the National Bank of Angola (BNA) held a meeting here Wednesday to assess the ongoing reform of the exchange rate regime and adopt measures to counter depreciation of its currency.
The committee decided to keep the interest rate unchanged at 15.5 percent, but raised the reserve requirement and established a new interest rate for a 7-day facility, as it implemented a floating exchange rate regime for Angola's currency Kwanza, according to a press release posted on the BNA website.
The BNA also said it had decided to relax the limits on various payment instruments used to finance goods imports.
Since January 2018, BNA governor Jose Massano has started reforms, including replacing the fixed exchange rate regime with floating exchange rate, adopting the monetary base as an operational variable to better control liquidity, lowering and changing the basis for banks' mandatory reserves and unifying the rate on the marginal lending facility with that of the bank's basis interest rate.
The southern African country has signed an agreement with the International Monetary Fund (IMF) which requires further liberalization of the financial exchange market, but the high depreciation of the national currency has caused a significant increase in market prices, especially for imported products that constitute the majority of goods consumed in Angola.
The IMF in March approved a 3.7 billion U.S. dollars loan program for Angola and urged the country to pursue further exchange rate flexibility to facilitate market-based price formation.
The loan to be disbursed over three years is meant to support ongoing economic reforms in Angola.
