Angola’s Central bank last week sold $160 million in foreign currency to defend the Kwanza, the country’s Press Agency reported on Monday.
The Kwanza, Angola’s local currency, has fallen 10 percent since the tumble in global oil prices and hit a record low against the dollar on Monday. The southern African country is the continent’s second largest exporter of oil and one of the fastest growing economies, but its dependence on revenue from oil sales means government income has been shrinking due to the oil price crash.
In January, Angola’s cabinet asked the parliament to revise down the oil price assumption for the 2015 budget to $40 per barrel from its earlier projection of $81 per barrel. The new benchmark would slash $14 billion from the budget, as the country prepares for austerity. The Angolan government says it has suspended construction of all the country’s new roads following slump in global oil prices.
This is not the first time Angola is finding itself in such position. When oil prices dropped during the 2008 global financial crisis, Angola ended up with nearly $7 billion in delayed payments to building companies. The price of OPEC basket of twelve crudes, which includes Angola’s Girassol, stood at $48.19 a barrel on Monday.
The Kwanza, Angola’s local currency, has fallen 10 percent since the tumble in global oil prices and hit a record low against the dollar on Monday. The southern African country is the continent’s second largest exporter of oil and one of the fastest growing economies, but its dependence on revenue from oil sales means government income has been shrinking due to the oil price crash.
In January, Angola’s cabinet asked the parliament to revise down the oil price assumption for the 2015 budget to $40 per barrel from its earlier projection of $81 per barrel. The new benchmark would slash $14 billion from the budget, as the country prepares for austerity. The Angolan government says it has suspended construction of all the country’s new roads following slump in global oil prices.
This is not the first time Angola is finding itself in such position. When oil prices dropped during the 2008 global financial crisis, Angola ended up with nearly $7 billion in delayed payments to building companies. The price of OPEC basket of twelve crudes, which includes Angola’s Girassol, stood at $48.19 a barrel on Monday.
