OPEC’s Angola Drops Its Currency Further a Week After Ending Peg

LUANDA (Capital Markets in Africa) – Angola weakened its currency by 10 percent against the dollar, letting it drop for a second time this month after scrapping a peg in a bid to boost its battered economy.

The central bank sold euros on Tuesday at a rate of 248.77 kwanzas per euro, it said in a statement on its website. That was 11 percent weaker than the rate of 221.26 used at the last auction a week ago. It moved its dollar rate to 203.61 from 182.69.

The OPEC member, Africa’s second-biggest oil producer, has let the kwanza fall around 18 percent against the greenback this year. The moves follow central bank Governor Jose de Lima Massano’s announcement on Jan. 3 that the country was ending the peg to the dollar that had been kept at a level of around 166 since April 2016.

President Joao Lourenco is trying to attract investment just three months after replacing Jose Eduardo dos Santos, who ruled the former Portuguese colony for almost four decades, and revive an economy still reeling from the oil-price crash in 2014. The black-market rate has plummeted to 445 per greenback as shortages of hard currency have mounted.

The central bank has mostly auctioned euros in the past two years because international lenders are reluctant to provide the southern African nation with dollars, given the perceived risk of violating anti-money laundering laws. Angola ranks among the 20 most corrupt countries in the world, according to Berlin-based Transparency International.

Source: Bloomberg Business News