BoN, BNA to discuss inflated exchange rates

05 Nov 2015 13:40pm
WINDHOEK, 05 NOV (NAMPA) – Discussions are underway between the Bank of Namibia (BoN) and Banco Nacional de Angola (BNA) on the current inflated exchange rate of 40 per cent between the Kwanza and Namibian Dollar.
The BoN's Governor Ipumbu Shiimi announced this during a media briefing here on Wednesday while addressing concerns regarding the high exchange rate under the Currency Conversion Agreement which stands at 40 per cent.
The BoN and BNA implemented the Currency Conversion Agreement on 18 August 2015 to allow for the direct exchange of two currencies at the border towns of Oshikango and Santa Clara in Angola.
The aim of the agreement is to promote trade and reduce transaction costs for individuals and small businesses when paying goods and services at the two border towns.
The agreement is aimed at enabling the reciprocal acceptance of legal tender banknotes in Namibia and Angola by legally authorised financial institutions to conduct foreign currency exchange operations at the two border towns. It is also aimed at promoting and facilitating trade between Namibia and Angola.
Currently, one Namibian Dollar is equal to about Kwanza 10 (9.69).
“We agree that as Namibians we would wish our currency to be competitive relative to the Kwanza to attract more Angolan customers to Namibia,” Shiimi said.
The Governor said Kwanza exchanged at commercial banks will be repatriated to Angola and the BoN will be paid in United States Dollars (USD).
He added that the bank has raised this issue with the BNA and it is under discussion.
“However, we would also like to stress that Angola as sovereign state is within her full right to set the exchange rate at the level she sees fit to prevent unnecessary outflow of foreign exchange from Angola,” he said.
Shiimi said the BoN respects views and welcomes advice from its stakeholders with the view to make the Currency Conversion Agreement work better to promote trade between two nations.
The Governor said the public will be informed of the outcome of the discussion, once concluded.