Ver Angola

Economy

Kwanza depreciates 16 percent this year to 534.1 kwanzas per dollar, predicts consultant

The consultancy Oxford Economics predicts that the kwanza will depreciate to 534.1 kwanzas per dollar, which compares with 460.6 kwanzas per dollar recorded in 2022.

: Ampe Rogério/Lusa
Ampe Rogério/Lusa  

"We predict that the kwanza will depreciate to an average of 534.1 kwanzas per dollar this year, compared to 460.6 in 2022; this forecast assumes that the global price of oil will recover to 86.8 dollars per barrel by the end of end of this year and that domestic oil production improves in the second half of this year after falling in the first six months, helping to stabilize the local currency in this half", write the analysts, who thus estimate a 16 percent drop in the value of Angolan currency.

In a comment on the evolution of the kwanza, the African department of the British consultancy Oxford Economics writes that "the Angolan currency is in negative territory due to the recent drop in the world price; the fall also contributed to worse budgetary and commercial results in the first quarter, which was exacerbated by planned maintenance on an important well", but point out that, even so, "it is still expected that oil production and prices will rise during the rest of the year".

In the first five months of the year, the kwanza lost 9 percent against the dollar, in line with the 9 percent decline in crude oil prices from January to May. Thus, the kwanza went from 503.6 to the dollar, at the beginning of January, to 550.4 at the end of May, representing a correction in relation to the rises of the last semesters.

The reduction in oil production and prices had an impact on the Angolan public accounts, which are still heavily dependent on the evolution of crude oil despite efforts to diversify the economy.

"The decline in prices is negatively affecting not only the exchange rate, but also Angola's budgetary and commercial results", conclude the analysts, recalling the 27.1 percent drop in the trade surplus in the first four months of the year, compared to the previous four months, and the 33 percent reduction in revenues in the first quarter compared to the last three months of 2022.

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