Notice No. 12/2021 (December 23)

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NOTICE NO. 12/2021 SUBJECT: FOREIGN EXCHANGE POLICY

• Foreign Exchange Position Limit Whereas it is necessary to update the daily foreign exchange position limit for banking financial institutions. Pursuant to the combined provisions of paragraphs (d) and (f) of paragraph 1 of Article 31, and paragraph (f) of paragraph 1 of Article 54, both of Law No. 24/21 of October 18, the Law of the Banco Nacional de Angola, combined with paragraph (o) of paragraph 1 of Article 166 of Law No. 14/21 of May 19, the General Regime for Financial Institutions Law, and with Article 12 of Law No. 5/97 of June 27, the Foreign Exchange Law. I HEREBY DETERMINE:

Article 1. (Subject Matter) This Notice establishes the global foreign exchange position limit, as well as its calculation basis for Banking Financial Institutions.

Article 2. (Scope) This Notice applies to Banking Financial Institutions supervised by the Banco Nacional de Angola, as provided for in the General Regime for Financial Institutions Law, hereinafter abbreviated as Institutions.

Article 3. (Definitions) For the purposes of this Notice, the following shall apply: a) Net Foreign Exchange Position in a Currency: the difference between assets and liabilities, in that currency; b) Global Foreign Exchange Position: the algebraic sum of net foreign exchange positions held in various foreign currencies, converted into United States Dollars (USD).

Article 4. (Limit for the Foreign Exchange Position)

1. Institutions must maintain, on a daily basis, a global foreign exchange position that does not exceed 5% (five percent) of their Regulatory Own Funds (ROF), regardless of whether the position is long or short.
2. 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 5. (Calculation Basis) Foreign currency assets and liabilities shall be considered at their net book value, provided that any impairment allowances have been established in foreign currency.

Article 6. (Conversion)

1. The foreign exchange position shall be calculated in United States Dollars (USD).
2. For the purposes of the preceding paragraph, when converting foreign exchange positions in different currencies to USD, the prevailing reference average exchange rate on the date to which they relate shall be applied.
3. The rate referred to in paragraph 2 shall equally be applied when converting ROF from Kwanzas to USD.

Article 7. (Management of the Foreign Exchange Position)

1. Institutions must sell excess foreign exchange positions in the interbank foreign exchange market or to the Banco Nacional de Angola, immediately after submitting the report on the Daily Foreign Exchange Position Limit to the Banco Nacional de Angola.
2. Institutions with short foreign exchange positions that do not comply with the limit must seek to purchase foreign currency in the interbank foreign exchange market, so as to restore their foreign exchange position within the limits.

Article 8. (Information Elements)

1. The daily closing foreign exchange operations report must be submitted to the Banco Nacional de Angola, in accordance with specific regulations.
2. For the purposes of this article, the elements contained in the daily foreign exchange position report shall be considered, as established by specific regulations.

Article 9. (Sanctions)

1. Institutions that record a short foreign exchange position failing to comply with the limits set out in this Notice are prohibited from conducting foreign currency sales transactions with their customers, until the foreign exchange position is restored within said limits.
2. Institutions that record short or long foreign exchange positions failing to comply with the daily limits set out in this Notice shall incur a sanction for each day of non-compliance, pursuant to Law No. 14/21 of May 19, the General Regime for Financial Institutions Law.

Article 10. (Interpretation and Omissions) Doubts and omissions arising from the interpretation and application of this Notice shall be resolved by the Banco Nacional de Angola.

Article 11. (Repeal Clause) Notice No. 14/2019 of December 2 is hereby repealed, along with any regulations contrary to the provisions of this Notice.

Article 12. (Entry into Force) This Notice enters into force on the date of its publication. PUBLISHED. Luanda, December 3, 2021. THE GOVERNOR JOSÉ DE LIMA MASSANO