LONDON (Reuters) - Angola does not need to devalue its currency at the moment but will work on measures to lessen the gap between the formal and informal exchange rates, central bank governor Valter Filipe da Silva told Reuters.
Angola’s economy has been suffering from the drop in crude prices and an acute hard currency crunch, fuelling a thriving black market for the currency of Africa’s second largest oil exporter after Nigeria.
The bank currently quotes the kwanza at around 165 per dollar, although the currency typically trades at much weaker levels in the black market.
The kwanza devalued by more than 30 percent last year and in January was allowed another 15 percent weakening to 155 after which it has slipped gradually lower.
Speaking to the sidelines of a meeting at think-tank Chatham House on Thursday, da Silva said policymakers had needed to focus first on stabilising hard-currency availability for food, medicine and raw material imports, then on managing the monetary base but also on synchronising fiscal and monetary policy.
“What we will do this month in the monetary policy committee of the central bank is to discuss the matter,” said da Silva, speaking in Portuguese.
“But ... because we are having a very positive monetary policy, the inflation rate is slowing, the differential gap is narrowing - therefore, we understand that it isn’t necessary at this moment to devalue the currency,” said da Silva.
In November, the central bank kept its benchmark lending rate unchanged at 16 percent, citing slowing price increases. Inflation rose by 2.14 percent in September month-on-month, but that was a slowdown from the more than 4 percent increase in July.
Speaking about recent oil price rises, da Silva said it was more important for the southern African country to concentrate on overhauling the state oil firm Sonangol.
“It is evident that this rise in oil prices may not be structural. More important for Angola is that the country does profound work in restructuring Sonangol - what is taking place is positive and should reduce the cost of oil exploration.”
Isabel Dos Santos, daughter of Angolan President Jose Dos Santos, took over as CEO of the state energy giant in June and has pledged to spin off non-core investments such as banking and real estate and to focus on the bottom line.
Additional reporting by Herculano Coroado in Luanda; editing by Mark Heinrich
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