22 Mar 2017 08:10am
WINDHOEK, 22 MAR (NAMPA) The Namibian Reserve Bank and Angolan Reserve Bank have agreed to shorten the repayment time frame of a currency exchange agreement, with the last payment scheduled for June 2018.
The Bank of Namibia (BoN) and Banco Nacional De Angola (BNA) entered into an agreement on 18 June 2015 to allow the exchange of the Angolan Kwanza for the Namibian Dollar at Oshikango in northern Namibia, in an effort to maintain the momentum of business transactions between the two countries.
The two central banks agreed for the BNA to repay the BoN repurchase costs for Kwanzas that have come and gone through Namibia since the agreement was implemented on 18 June 2015.
As per the first agreement, the BNA has to pay the BoN about US.dollars 426 million (about N.dollars 5.4 billion) (5 404 873 902.13) in quarterly instalments before the agreement expires in 2019.
BoNs Deputy Director for Corporate Communications, Kazembire Zemburuka told Nampa on Monday that the two reserve banks met in December 2016 and entered into a new agreement.
The two central banks met last year to discuss various issues which included the status of the Currency Conversion Agreement. The outstanding obligation owed by BNA was discussed and agreed that the repayment period be shortened.
Zemburuka said there were no shortcomings in the first agreement as the BNA honoured the repayment schedule, however, this development reflects an improved economic outlook for Angola following a positive outlook for crude oil prices.
He noted that crude oil accounts for a significant portion of Angolas exports and foreign reserves accumulation.
Zemburuka said the last payment made by the BNA was US.dollars 20 million (approximately N.dollars 253 million (253 749 948.46) and brought the total repaid to US.dollars 120 million (about N.dollars 1.5 billion) (1 522 499 690.74).
This leaves the total debt outstanding at US.dollars 306 million (approximately N.dollars 3.8 billion) (3 882 374 211.39), he said.
The BoN believes that BNA will honour this obligation agreed between the two institutions as it has done thus far.
He stressed it is expected that close to N.dollars 4 billion will flow into the Namibian economy and boost the foreign reserve over the next year and half.
Namibia has recorded international reserves of about N.dollars 22.9 billion by 31 January 2017.
Zemburuka noted that such an inflow will lift the level of foreign reserves and positively impact the economy.