In 2024, the kwanza depreciated by 9.1 percent against the dollar and by 3.5 percent against the euro, in a year in which the Angolan foreign exchange market was relatively stable, according to the 2024 Foreign Exchange Market Evolution Report, prepared by the National Bank of Angola (BNA).
According to the BNA, commercial banks acquired a total of 10.8 billion dollars in 2024 compared to 9.9 billion dollars in 2023, an increase of 9.8 percent, with the National Treasury and the BNA making available to banks, on a one-off basis, two billion dollars and 953.5 million dollars, respectively.
Wilson Chimoco said this Wednesday, in statements to Lusa, that the aforementioned data bring "positive indicators" for 2025, especially in the increase in the supply of foreign currency in the market, especially within the main operators such as the National Treasury and the BNA.
"The expectation [for 2025] is exactly that, that there will be an increase in the supply of foreign currency and this increase can be seen in the main operators, in the National Treasury with the reduction in the weight of debt service in foreign currency, foreseen for 2025 in the OGE (General State Budget)," he said.
The economist also considered that the initiative to issue Eurobonds of up to three billion dollars could, therefore, open up space for the Treasury to allocate [currency] to the foreign exchange market in a "much more regular" manner.
In 2025, the oil sector should also boost the supply of foreign currency in the Angolan foreign exchange market.
"Not so much due to the price of oil, we may see a stabilization or even a downward trend in the price of a barrel. However, the indication that we have that the New Gas Consortium will now come into operation in the first half of the year could increase gas exports and thus increase the supply of foreign currency in the market", said the specialist.
Chimoco also pointed to the diamond market, whose public company in the sector – Endiama – projects a considerable increase in production in 2025, as another source of foreign exchange supply for the country, especially "if prices increase again".
The economist also recalled that the BNA Monetary Policy Committee relaxed monetary policy at its last meeting "to make it easier for commercial banks, which have greater access to the kwanza, to participate continuously in the search for foreign currency on the foreign exchange market".
"And then pass it on to its customers so that they can carry out their operations throughout the current year," he said.
Regarding the evolution of exchange rates, Wilson Chimoco expressed the expectation that there will be a "slight depreciation" in 2025, which should be justified by the "greater flexibility of monetary policy that will allow for a greater supply of kwanzas on the market".
"This will give commercial banks more room to participate in the foreign exchange market," explained the analyst, highlighting that a possible reduction in the average price of a barrel of oil expected for 2025 – set at 70 dollars in the 2025 State Budget – could also lead to a depreciation.
If international markets fail to maintain [the price] above 70 dollars/barrel, the government "will have great difficulty in maintaining the supply of foreign currency in the foreign exchange market, which will have to be channeled towards paying debt in foreign currency and this could precipitate a currency depreciation", concluded the Angolan economist.
International reserves stood at 15.6 billion dollars compared to 14.7 billion dollars in 2023, equivalent to around 8.3 months of imports of goods and services.
