The National Bank of Angola (BNA) has decided to adjust the exchange rate after it remained stagnant for five months since reaching the 912.0 Kwanzas per dollar mark in December last year. This Wednesday, one dollar was worth 911.955 Kz, meaning the Kwanza appreciated by just 0.005% against the dollar.
The Kwanza is appreciating in a context where the dollar is once again strengthening in international markets and Brent crude oil is trading close to 60 USD/barrel. This scenario raises renewed doubts about the BNA’s interventions in the foreign exchange market, as it seems to have revived a kind of fixed exchange rate regime—since in a free market, this kind of stagnation is not considered normal.
Nevertheless, despite this slight appreciation, the Kwanza is essentially stuck. The national currency only traded above 912.0 Kz on December 21 and 22, when it hit 918.0 Kz per dollar, before falling back to 912.0 the next day.
Although the governor of the BNA has repeatedly stated over the past months that the central bank is not interfering, several banking sources contradict this claim, saying the banking regulator has an “invisible hand” that ends up pressuring banks not to make offers it considers “speculative,” which has prevented the national currency from depreciating.
Unlike the situation with the US dollar, the Kwanza’s exchange rate against the euro has shown fluctuations over the past few months. Since the beginning of the year, the national currency has depreciated by 10% against the euro, moving from 942.7 Kz per euro to 1,045.4 Kz this Wednesday (May 7). This is because the European currency has been more volatile against the dollar in international markets, and the exchange rate in Angola is defined based on its relationship with the dollar.
However, this scenario is not new. The national currency was also stuck at around 820 Kz for seven months, between June 2023 and February 2024, after an abrupt 39% depreciation in 2023. That plunge began on May 12, 2023, and only slowed starting June 28 of the same year, in what was described as an “infernal” month and a half for the country.
Thus, as happened in 2023 after hitting historic lows—when the exchange rate reached 951.6 Kz per dollar on October 1, 2024—the Kwanza is once again stagnating.
Source: Expansão
