"The risk of a sharp depreciation of the currency remains high due to the uncertainty in the energy market caused by the covid-19 pandemic," write the analysts of this African branch of the Oxford Economics consultancy.
In the commentary on the evolution of the kwanza, sent to investors and to which Lusa had access, the analysts state that "although the currency's strong trading and the improvement in risk sentiment have softened short-term risks, the kwanza will probably remain under pressure in the short term due to the strong dependence on oil, which is facing a reduction in demand and production."
Last Monday, the National Bank of Angola (BNA) announced that the kwanza exchange rate has stabilized in recent months and considered that it should remain that way in the short term, with the exchange rate of the national currency approaching the breakeven point.
The information was given during the presentation of the report on the evolution of the foreign exchange market, by the BNA, where the factors that contributed to the stability were highlighted, including the measures adopted by the central bank since 2017 and the evolution of oil prices.
In 2020, the kwanza maintained a depreciation path against the dollar until November, when it stabilized, maintaining this stability to date.
In December 2020, the kwanza closed at 656.224 against the dollar and 805.117 against the euro, which corresponds to an annual depreciation of 26.52 percent and 32.83 percent, respectively, with the real effective exchange rate approaching 2.3 percent by the end of 2020.
"We think speculators have pushed oil prices too fast and too far and we expect the price of a barrel of Brent to peak in the second quarter, before returning to below $61 by year-end," the analysts write, concluding that, "so the forecast points to a weaker average exchange rate, from 578.3 kwanzas per dollar in 2020 to $648.7 in 2021."
The rise in oil prices in the first quarter of this year helped the kwanza regain some ground lost in recent months, having recovered to below 620 kwanzas per dollar, the best level in the last five months.
From December to the end of February, the kwanza appreciated 3 percent, over the same period as the price of a barrel of oil rose 29 percent to $65.9 per barrel.
"The appreciation of the kwanza in the last two months brings some relief, since the Angolan currency lost 27 percent of its value against the dollar last year," following the currency reform introduced in 2019, and in a context in which the parallel market trades the kwanza 14 percent worse than the official rate, "much better than the 60 percent that was recorded in November 2017," the analysts conclude.
