Angolan currency looses value (- 37%) in the last year

The Angolan currency (Kwanza- Kz) lost 37% of its value (in USD) as a result of last year’s crude oil price crash. A carbon-dependent economy (with oil and diamonds being, by far, the country’s largest exports), Angola was hard hit by the evolution of oil prices in the international markets.

One USD was worth Kz 135,968 – average oficial interbank exchange rate in the period of 14 to 16 September 2015, compared to Kz 99 around one year ago. The informal (street) exchange rate reaches values over Kz 200 – Agência Lusa values cited here.

The impact in daily life is felt through increased inflation. International money transfers have also been affected.

In an ironical twist, with crashing international oil prices resulting in plummeting fiscal income, the Angolan Government was forced to cancel fuel subsidies, increasing gas prices at the pumps. In addition to escalating transportation costs, increasing fuel prices are especially grievous as virtually any house in Angola depends on generators for electricity, at least as a (frequently needed) backup to the public grid (unavailable in many regions or unreliable at best). This counter-intuitive effect compounded the inflation generated by the deteriorated exchange rate.

You may read more on this subject in this article (Portuguese).

Published by

Luís Chambel

Exploration & Research Mining Engineer, MSc Engineering Geology, MBA, PhD European Engineer -EUR ING; Euro Geologist - EURO GEOL

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