The National Bank of Angola (BNA) is conducting eight foreign exchange auctions in September to make euros available for letter of credit (L/C) transactions.

Sales of euros are taking place against the backdrop of a sharp depreciation of the Angolan kwanza.

Currency depreciation

At the time of the first foreign exchange auction the Angolan currency had depreciated by 42.8 per cent since the beginning of the year to be worth 324.2 kwanzas per euro.

The BNA placed EUR 30 million in the first session of the auction on the primary market.

L/C funds

In the second session, EUR 100 million were sold to commercial banks for the opening and confirmation of L/Cs to ensure sufficient funds for the import of various goods.

The BNA says it will hold eight auctions in September, with the sale of foreign currency equivalent to US$700 million.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.