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Featured

13 April 2017 Author   Eric Nyasha Mhunduru

The Bank of Namibia (BoN) says it expects the Angolan central bank to pay back in excess of N$2 billion by the end of 2017, following the cancellation of a currency conversion agreement between the neighbouring countries at the end of 2015. BoN Governor Iipumbu Shiimi said on Wednesday that almost US$300 million was still owed by the Angolan apex bank after last week’s payment of at least US$55 million.

Shiimi highlighted that during 2016 alone, a total of US$80 million was paid back by the Banco Nacional de Angola to BoN.

He said at least US$426 million was initially owed by Banco Nacional de Angola to BoN, and the Angolan central bank has been consistent in repaying the outstanding amount on a quarterly basis.

“We expect almost N$2 billion at the current exchange rate to be paid back by the central bank of Angola by the end of this year, following the latest payment of at least US$55 million to BoN last week,” Shiimi said.

However, in the BoN 2016 annual report released last week, the central bank Governor said that at least US$120 million had been paid since 2015 by the Angolan central bank towards their Namibian obligation.

“Of that amount, US$80 million was for 2016 alone and by the end of the reporting period as at December 2016, the total outstanding obligation amounted to US$306 million,” the BoN annual report stated.

BoN and the Banco Nacional de Angola entered into a currency conversion agreement on 22 September 2014, which was implemented on 18 June 2015, to enable residents of the border towns of Oshikango and Santa Clara to exchange their respective national currencies to facilitate the payment of goods and services.

The now defunct agreement soon faced challenges, including the exchanging of currencies outside the scope of the agreement, which saw the two currencies only allowed to be exchanged at certain commercial banks in Angola.

The currency conversion deal was suspended in December 2015.

Meanwhile, the BoN has kept the Repo rate unchanged at seven percent, saying that the rate remained appropriate to support growth, while maintaining the one-to-one link between the Namibia dollar and the South African Rand.

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