Banco Nacional de Angola (BNA - National Bank of Angola) has issued a clarification on the Angolan settlement of letters of credit (L/Cs) in favour of the exporter.

Such settlements require a debit from an importer's account denominated in national currency, at the exchange rate for the sale of foreign currency in a commercial bank on the date of settlement, according to a circular from the central bank.

Confusion clarified

The clarification follows confusion over the rules and procedures applicable to foreign exchange transactions for the import and export of goods issued in 2018 and 2019.

These stated that, on the granting of credit, "it is not permitted to grant credit with capital denominated in foreign currency."

This means that banks are obliged to sell the foreign currency to the importer on the settlement date of the foreign currency liability according to the BNA's clarification.

Application of rule

This rule applies regardless of whether the commercial bank has used their currency position for the settlement of the liability or has purchased foreign currency specifically for the settlement.

If the importer does not have enough their account to cover the settlement, banks must grant a loan in kwanza, in the amount of the deficit recorded in the client's account in national currency, and this amount may not be indexed to any foreign currency.

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