Angola’s currency fell the most since September 2001 to an all-time low after the central bank devalued the kwanza as the drop in oil prices cut the main source of government revenue and export earnings.
The kwanza slid 15 percent to 158.7370 against the dollar as of 12:35 p.m. in the capital, Luanda. The currency tumbled 24 percent in 2015, its eighth year of declines and the most since 2003, according to data compiled by Bloomberg.
The kwanza was sold at an average rate of 156.386 last week compared with 135.988 a week earlier, the Luanda-based National Bank of Angola said on its website on Dec. 31. That’s the biggest single devaluation since policy makers last year started cutting the currency’s exchange rate in several moves during the course of 2015, which Eurasia Group estimates amounted to 25 percent before the latest reduction.
Angola’s central bank Governor Jose Pedro de Morais is trying to reduce the gap between the kwanza’s official rate and that on the black market, where the currency was last year fetching between 270 and 280 versus the dollar. A drop of more than 65 percent in the prices of Brent crude since June 2014 has curtailed the flow of dollars into the economy of sub-Saharan Africa’s second-largest oil producer.
In November, the central bank, known as BNA, started managing foreign-exchange sales by commercial lenders to businesses as a response to the limited supplies of dollars. The policies leave companies at the mercy of the central bank’s view on which sectors need dollars the most, driving many corporates to the black market, Jose Severino, chairman of the Angola Industrial Association, or AIA, which has 2,100 members, said in December.