SOME Angolan banks running low on dollars are offering customers euro notes and other foreign currencies after a distributor said it could no longer supply US cash.
“We are advising our clients to use more euros, rands and even renminbi,” Fernando Teles, chief executive officer of Banco BIC SA, Angola’s biggest private bank by branches, said Thursday from Luanda, the capital. Some customers with dollar accounts may convert their money into euros before making a cash withdrawal, he said.
The euro may soon become a major foreign currency in Africa’s second biggest oil-producing country, according to Teles, a transition that could be supported by Angola’s historical links with Portugal, from which it gained independence in 1975.
In Angola, which has seen its own currency depreciate by more than 34% to an official rate of about 135 to the dollar this year, greenbacks are used to buy cars and houses and imported goods. On the streets of Luanda, with supply drying up, $1 is now worth as much as 270 kwanza. That’s a 17% increase from the black market rates in September when $1 was valued at 230 kwanza.
“There will continue to be foreign currency on the street, including dollar bills, but the tendency is for clients to use more credit cards and carry out more bank transfers,” Teles said. Angolan lenders are discussing several solutions to the shortage of dollars, he said.
Rand Merchant Bank, a unit of Johannesburg-based FirstRand Ltd., has a representative office in Luanda and said November 13 it would have to stop providing dollars to lenders in that country by the end of the month. The South African bank said it was notified in late October by the US lender providing the currency “that it would be discontinuing the supply of cash notes to RMB.” The FirstRand unit didn’t identify the US bank or RMB’s Angolan client banks.
Banco Angolano de Investimentos, Angola’s largest privately owned bank by assets, is limiting client withdrawals to $2,000 a week, a person with knowledge of the matter said this week. BIC allows clients to withdraw a maximum of $2,500 a day, according to Teles.
RMB said Friday it couldn’t quantify its share of the market to supply dollar notes in Angola and had no capacity to supply euros.
Hard to come by: US currency
A Bloomberg reporter was told by four Luanda street money changers on Thursday that while they were buying dollars, they had none to sell.
Angolans traveling abroad should use credit, debit and prepaid cards, the country’s banks association said on its website on November 5, citing the impact on supplies of cash of steps to fight money laundering and the financing of terrorism. It warned of the “continued reduction in the delivery of banknotes” and advised travellers to buy the currency of their destination country, rather than dollars.
Banks need to have greater control over the use of cash to comply with international rules, the association said. Since Angola imports cash from other countries, especially the US and the European Union, it needs to comply with these measures, it said.