Instruction No. 04-2016 of May 13

INSTRUCTION NO. 04/2016 of May 13 SUBJECT: MONETARY POLICY

• Mandatory Reserves

Within the framework of adjusting the levels of use of monetary policy instruments to the context of the country's current macroeconomic situation, there is a need to alter the wording of point No. 8.1 and number 15 of Instruction No. 02/2016 of April 11, regarding Monetary Policy - Mandatory Reserves.

In the exercise of the powers conferred upon me by Article No. 51 of Law No. 16/10 of July 15, the Law of the Bank of Angola.

I DETERMINE:

Point No. 8.1 shall have the following wording:

8.1 The mandatory reserve coefficient to be applied to the daily balances of the items that make up the incidence base defined in number 2, excluding the accounts of the Central Government, Local Governments, and Municipal Administrations, is 30% (thirty percent), provided that banks may comply with up to 20% (twenty percent) with Treasury Bonds belonging to the banks' own portfolio, provided they were issued from January 2015 onwards and the total amount of Financing Contracts carried out with the Ministry of Finance, observing the respective weightings below:

Weightings for National Treasury Bonds:

CONTINUATION OF INSTRUCTION NO. 04/2016 Page 2 of 4 a) Bonds with a maturity equal to or greater than 5 (five) years – 100% (one hundred percent) of their nominal value; b) Bonds with a maturity of 4 (four) years – 75% (seventy-five percent) of their nominal value; c) Bonds with a maturity of 3 (three) years – 50% (fifty percent) of their nominal value; d) Bonds with a maturity of 2 (two) years – 20% (twenty percent) of their nominal value.

Weightings for Financing Contracts carried out with the Ministry of Finance: a) Disbursements of Financing Contracts with terms equal to or greater than 7 (seven) years – 100% (One hundred percent) of the disbursed nominal value; b) Disbursements of Financing Contracts with terms between 6 (six) years, inclusive, and 7 (seven) years, exclusive – 75% (seventy-five percent) of the disbursed nominal value; c) Disbursements of Financing Contracts with terms between 4 (four) years, inclusive, and 6 (six) years, exclusive – 30% (thirty percent) of the disbursed nominal value; d) Disbursements of Financing Contracts with terms between 2 (two) years, inclusive, and 4 (four) years, exclusive – 10% (ten) of the disbursed nominal value.

Number 15 shall have the following wording:

15. The effective value of reserves to be considered for compliance with the requirement in national currency (MN) is equal to the sum of 75% (seventy-five percent) of the daily balances of the Central Government accounts, 50% (fifty percent) of the daily balances of the Local Governments and Municipal Administrations accounts, and the amount referred to in point 8.1, minus the amounts established in numbers 12 and 13 according to the following formula:

• ROdn = ∑[GCdn+ (GLdn) + ETn – DCTn - NMn (T-1)]

Where: • ROdn = effective mandatory reserves in national currency to be considered for compliance with the requirement on day d; • GCdn = 75% (seventy-five percent) of the daily balances of the Central Government accounts in MN on day d; • GLdn = 50% (fifty percent) of the daily balances of the Local Governments and Municipal Administrations accounts in MN on day d; • ETn = requirement in week T in MN, corresponding to 30% (thirty percent) on the incidence base, as referred to in number 9; • DCTn = value corresponding to 80% (Eighty percent) on the position of the last business day of the week of portfolio formation of credit granted by the Banking Financial Institution to the sectors of agriculture, livestock, forestry, fisheries, industry, energy, water, and provision of restaurant and hotel services, transportation, and information technology, and others to be considered specifically, as well as all credits granted under the Angola Invest Program and the BDA Credit Lines, provided they have a maturity greater than or equal to 24 (twenty-four) months.

This Instruction enters into force on 16/05/16 for the purpose of constituting the incidence base, and the effective compliance with the requirement must occur on 23/05/16.

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Doubts regarding the interpretation and application of this Instruction are clarified by the Payments System Department (DSP).

PUBLISH Luanda, May 13, 2016 THE GOVERNOR VALTER FILIPE DUARTE DA SILVA