Angolan Banks Have to 2012 to Value 80% of Capital in Kwanza, Bank Says

Angola’s commercial banks have until 2012 to value 80 percent of their capital in the local currency, the kwanza, as the central bank tries to reduce the country’s dependency on the dollar.

The banks, which are currently allowed to have 100 percent of their capital in foreign currency, were informed of the ruling on Nov. 10, said Jose de Lima Massano, governor of the central bank. The new regulation was not announced publicly.

The changes are part of a review of legislation that may also include the introduction of factoring and leasing as financial instruments, Massano said in an interview in the capital, Luanda, on Nov. 19.

On Nov. 10, the central bank lowered its landmark rediscount rate, the rate it charges commercial lenders to borrow money, to 25 percent from 30 percent. Tackling Angola’s annual inflation rate, which climbed to 16 percent in October, is a “gigantic work” that will involve all the government and not just the central bank, he said.

To contact the reporter on this story: Candido Mendes in Luanda, Angola at cmendes6@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.