The data are contained in the first edition of the Annual Report on Foreign Assets detailing the evolution of international reserves of the Republic of Angola in 2020, released Wednesday on the website of the National Bank of Angola (BNA).
At the base of this negative evolution was the negative balance of 3,963 million dollars between the volume of expansion and contraction factors of international reserves.
Expansion factors, mainly made up of oil and diamond revenues, Escrow Account resources and financing totalled US$6.909 billion against US$10.872 billion associated to contraction factors, essentially associated to debt service disbursements and CUT-ME spending (movements in foreign currency in the Treasury Single Account), the report said.
In 2020, "the liquidity levels of foreign assets were maintained, with investments being made in safer financial instruments," the document highlights, pointing out the high volatility of international financial markets due to the impacts of the covid-19 pandemic, which led to a generalized decrease in the reference interest rates of the main central banks.
Foreign assets are defined as resources in foreign currency with the purpose of preventing the impacts of adverse situations on the balance of payments and contributing to the stability of the national currency.
The report also stresses that the world economy is expected to maintain its contractionary trend in the first half of 2021 due to several risks, including an increase in the number of covid-19 infections with a negative impact on economic activity and the emergence of new strains.
This risk reinforces, according to BNA, "the concerns about the possibility of the total reopening of economic activity a little all over the world, with direct impact on the increase of fiscal deficits to contain the increase in unemployment.
Angola's net international reserves (foreign currency reserves) were set at US$8,767 million in 2020, sufficient to cover 11.81 months of imports of goods and services and remaining above the minimum limit established in the International Monetary Fund's Extended Financing Program.
