Angola | 2018.02.06

Following the adoption of a currency band, a number of regulatory rules related to the purchase and sale of foreign currency were issued by the Angolan Central Bank ("BNA").


By means of Instruction No. 1/18, of 22 January 2018, the BNA established the procedures for buying and selling foreign currency in auctions carried out electronically in the Exchange Market Management System ("SGMC"). The BNA may also carry out direct sales to cover sovereign requirements, and on an exceptional basis, whenever the supply of goods and services of critical importance for the country is at stake. For private operations, the BNA may also make direct sales to commercial banks based on the relevant bank's demand maps. Further, the BNA may organize specific auctions for exchange rate coverage of letters of credit.


Commercial banks may only participate in the auctions provided they meet certain requirements set out in the banking laws, including those related to the national currency mandatory reserve and the limit of foreign exchange position and regulatory solvency.


In sales auctions, each bank may submit up to 4 bids with different exchange rates, with the maximum and minimum limits being set at 2% of the reference rate at the date of the auction. The value of each bid shall not be less than EUR 500,000. The amount of each bank's bid shall be limited to the equivalent of 15% of its own funds. The maximum purchase amount for each bank is also limited to 25% of the offer placed by the BNA.


Instruction No. 03/18, of 19 January 2018, defined the process whereby the reference rate is set, and further determined that the reference exchange rate shall result from the calculation of the weighted average of the sales rates of the foreign exchange auctions organized by the BNA. The buying exchange rate is calculated with a reduction of up to 0.25% on the selling exchange rate. It is also determined that, in marketing foreign currency in the interbank market and to their customers, commercial banks may apply a margin of up to 2% on the reference exchange rate as published by BNA.


In turn, through Instruction No. 02/2018, of 19 January 2018, the BNA regulated the procedures to be observed by commercial banks when executing foreign exchange transactions. From amongst the applicable rules, it is worth highlighting the obligation for banks to adopt strict mechanisms to ensure the prevention of money laundering, in particular with regard to the identification of the actual beneficiaries and the corporate bodies of their clients in order to detect conflicts of interest and politically exposed people; the client’s record in discharging tax liabilities; and the assessment of the client’s financial capacity.


On January 19, BNA also issued Instruction No. 04/2018, through which the participation of Development Banks in the Interbank Money Market for liquidity purposes was permitted. The liquidity-providing operations are to be carried out for a period of 180 days or more, and through the Asset Market Management System ("SIGMA"). The applicable interest rates shall not be higher than those provided for in the Luanda Interbank Offered Rate - LUIBOR.


It should also be mentioned that the BNA Order No. 1/18, of 22 January 2018, determined that commercial banks should observe daily an overall foreign exchange position not exceeding 10% of their Regulatory Own Funds ("ROF"), with the ROF calculated in the previous month being taken into consideration for this purpose. A transitional regime has also been established, according to which commercial banks must comply with the abovementioned limit by the following deadlines:


  • 31 March of 2018, 20% of the ROF; and
  • 30 June of 2018, 10% of the ROF.


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