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32 billion Kwanzas traded as BoN suspends deal

30 November 2015 Author   Eric N Mhunduru

latest news BoN 30 novThe Bank of Namibia (BoN) has traded 32 billion Kwanzas, an equivalent of US$390 million since inception of its currency conversion agreement with Banco Nacional de Angola (BAN) in June.

The revelation by the central bank on Monday comes as it announced the halting of the arrangement amid increased challenges in operationalising it.

“The development follows various consultations between the two central banks which had revealed that the current trade agreement was causing too much strain on the Kwanza as Angola had to repay Namibia in United States Dollars (USD),” BoN Governor, Ipumbu Shiimi said.

“Certain measures were introduced to address identified challenges; however, these measures did not fully address these challenges.”

He said the suspension of the current currency conversion arrangement with the Banco Nacional de Angola (BAN) at Oshikango and Santa Clara will take effect on 02 December 2015.

The development, Ipumbu said is expected to pave way for a new mechanism which will take effect on 21 December 2015 where trade will only be limited to US$20 million per quarter.

“Under the new mechanism the BoN would now issue Namibian dollars to BAN which would then facilitate currency exchange at commercial banks and bureau de changes in Santa Clara.”

Shiimi said Namibians who wished to convert their Namibian dollars into Kwanzas or Angolans who wished to convert their Kwanzas into Namibian Dollars would be able to do so at commercial banks in Angola.

“Each individual transaction per day per person would be limited to 50,000 Kwanzas at the current rate of one Namibia dollar to 14 Kwanzas.”

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