Notice No. 14/2019 of December 2 on Foreign Exchange Position Limits

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 155, OF DECEMBER 2, 2019 NOTICE NO. 14/2019 SUBJECT: FOREIGN EXCHANGE POLICY

• Foreign Exchange Position Limit
  Whereas it is necessary to update the regulation regarding the daily foreign exchange position limit for Commercial Banks; Under the combined provisions of letters d) and f) of paragraph 1 of Article 21.º and letter d) of paragraph 1 of Article 51.º, both of Law No. 16/10 of July 15 – Law of the National Bank of Angola, letter l) of paragraph 1 of Article 90.º of Law No. 12/15 of June 17, Law of the Bases of Financial Institutions, and Article 12.º of Law No. 5/97 of June 27 – Foreign Exchange Law. I DETERMINE:
  Article 1.º (Object and Scope)
  This Notice establishes the global foreign exchange position limit for Commercial Banks, hereinafter referred to as “Banks”, and its calculation basis.
  ARTICLE 2.º (Definitions)

1. For the purposes of this Notice, it is understood that:
   1.1 Net Foreign Exchange Position in a Currency: the difference between assets and liabilities, in that currency;
   1.2 Global Foreign Exchange Position: the algebraic sum of net foreign exchange positions held in various foreign currencies, converted into United States Dollars (USD).
2. For the purposes of this article, the elements contained in the daily foreign exchange position report shall be considered, as established by specific regulation.
   Article 3.º (Limit for Foreign Exchange Position)
3. Banks must maintain, daily, a global foreign exchange position that does not exceed 2.5% (two point five percent) of their Regulatory Own Funds (ROF), regardless of whether the position is long or short.
4. For compliance with the preceding paragraph, ROF calculated at the end of the previous month shall be considered, including for this purpose accumulated results up to that date, even if not yet audited.
   Article 4.° (Calculation Basis)
   Foreign currency asset and liability elements shall be considered at their net accounting value after impairment, provided that such impairments have been established in foreign currency.
   Article 5.° (Conversion)
5. The foreign exchange position shall be calculated in USD.
6. For the purposes of the preceding paragraph, when converting foreign exchange positions in different currencies to USD, the reference average exchange rate in force on the date to which they relate shall be applied.
7. The rate referred to in paragraph 2 shall also be applied when converting ROF from Kwanzas to USD.
   ARTICLE 6.° (Management of Foreign Exchange Position)
8. Banks must sell any excess foreign exchange position in the interbank foreign exchange market or to the National Bank of Angola immediately after submitting the report on the Daily Foreign Exchange Position Limit to the National Bank of Angola.
9. Banks with short foreign exchange positions that do not comply with the limit must seek to purchase foreign currency in the interbank foreign exchange market in order to restore their foreign exchange position within the limits.
   ARTICLE 7.º (Information Elements)
   The daily closing foreign exchange operations report must be sent to the National Bank of Angola, in accordance with specific regulation.
   Article 8.º (Sanctions)
10. Banks that record a short foreign exchange position failing to meet the limits set forth in this Notice are prohibited from conducting foreign currency sales operations with their clients until the foreign exchange position is restored within said limits.
11. Banks that record short or long foreign exchange positions failing to meet the daily limits set forth in this Notice are fined for each day that non-compliance persists, in accordance with Law No. 12/15 of June 17, Law of the Bases of Financial Institutions.
    Article 9.º (Doubts and Omissions)
    Doubts and omissions arising from the interpretation and application of this Notice are resolved by the National Bank of Angola.
    Article 10.º (Repealing Provision)
    Notice No. 12/2018 of December 21 is hereby repealed, along with any regulation that contradicts the provisions of this Notice.
    Article 11.º (Entry into Force)
    This Notice enters into force on January 2, 2020.
    PUBLISH.
    Luanda, November 29, 2019.
    THE GOVERNOR
    JOSÉ DE LIMA MASSANO