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2021-05-05

Directive No. 05-DMA-2021, May 5

The National Bank of Angola's Assets Market Department issued Directive No. 05/DMA/2021 to update the calculation and compliance requirements for mandatory reserves, establishing a 22% coefficient for national currency and 17% for foreign currency on weekly average balances. The directive details eligible assets, including central government accounts and treasury bonds, while excluding specific guarantee accounts, and mandates actual compliance starting May 10, 2021. It formally revokes the preceding February directive and grants the central bank final authority to resolve interpretive ambiguities.

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GOVERNOR DIRECTIVE NO. 05/DMA/2021 ORIGIN: Assets Market Department (DMA) DATE 05/05/2021 SUBJECT: FINANCIAL SYSTEM

  • Requirements for the Calculation and Compliance of Mandatory Reserves

Given the need to update the calculation and compliance requirements for Mandatory Reserves in line with the current macroeconomic stability framework, aiming at the efficiency of monetary policy instruments, pursuant to Instruction No. 02/2021 of February 10.

This Directive serves to establish the following:

  1. The period for establishing the incidence base for calculating Mandatory Reserves in national currency (NC) and foreign currency (FC) is weekly.
  2. The Mandatory Reserves coefficient in NC to be applied to the weekly average balances of the items comprising the incidence base, as defined in Article 2 of Instruction No. 02/2021 of February 10, regarding Mandatory Reserves, is 22% (twenty-two percent).
  3. The Mandatory Reserves coefficients to be applied to the weekly average balances of Central Government – NC, Local Governments and Municipal Administrations – NC accounts are 22% (twenty-two percent), respectively.
  4. The daily balances of the NC mandatory reserve account, opened at the National Bank of Angola (BNA) in the name of each Banking Financial Institution, are eligible for compliance with NC Mandatory Reserves.
  5. The daily balances of guarantee accounts for the Credit Transfer Subsystem (STC), Check Clearing Subsystem (SCC), Direct Debits Subsystem (SDD) and Multicaixa Subsystem (MCX) are not eligible for compliance with NC Mandatory Reserves.
  6. The Mandatory Reserves coefficient in FC to be applied to the weekly average balances of the items comprising the incidence base, as defined in Article 3 of Instruction No. 02/2021 of February 10, regarding Mandatory Reserves, is 17% (seventeen percent).
  7. The Mandatory Reserves coefficients to be applied to the daily balances of Central Government – FC, Local Governments and Municipal Administrations – FC accounts are 100% (one hundred percent).
  8. The following assets are eligible for compliance with FC Mandatory Reserves: a) The balance corresponding to the daily closing of NC mandatory reserve accounts, opened at the National Bank of Angola in the name of each Banking Financial Institution, amounting to 2% (two percent) of the average incidence base for private FC entities; b) Foreign currency Treasury Bonds, belonging to the portfolio registered in SIGMA, issued from 2015 onwards, up to 80% (eighty percent) of the actual liability, excluding the 2% (two percent) referred to in the preceding sub-item; and c) The balance of the FC deposit account, opened at the National Bank of Angola in the name of each Banking Financial Institution.
  9. The Credit Rights item comprises: a) 80% (eighty percent) of Assets representing the value of regular NC credit disbursements, related to projects in the agriculture, livestock, forestry and fisheries sectors, granted up to April 14, 2021, provided they have a residual maturity of 24 (twenty-four) months or more; b) 100% (one hundred percent) of credits, as defined in Article 6 of Notice No. 10/2020 of April 3, regarding Credit Concession to the Real Sector of the Economy, regardless of residual maturity; and c) The actual deduction of credits from mandatory reserves, referred to in the preceding sub-items, must only be carried out after validation by the Credit Monitoring Office (GAC).
  10. Directive No. 02/DMA/2021 of February 10, and all regulations contrary to this Directive, are hereby revoked.
  11. For the purpose of establishing the incidence base for calculating Mandatory Reserves, Banking Financial Institutions must consider deposits made from April 26 to 30, 2021.
  12. The actual compliance with the liability referred to in the preceding number must occur starting from May 10, 2021.
  13. Doubts and omissions resulting from the interpretation of this Directive are resolved by the National Bank of Angola.
  14. This Directive enters into force immediately.

Luanda, May 5, 2021. ASSETS MARKETS DEPARTMENT Isabel Maria do Rosário Dias -Deputy Director-

CONTINUATION OF DIRECTIVE NO. 05/DMA/2021 2 of 5 ANNEX I

CONTINUATION OF DIRECTIVE NO. 05/DMA/2021 3 of 5 ANNEX II

  • WEEKLY LIABILITY FOR CENTRAL GOVERNMENT, LOCAL GOVERNMENTS (Provinces) AND MUNICIPAL ADMINISTRATIONS IN NATIONAL CURRENCY BANK: XXXXXXX CONSTITUTION PERIOD: From XX/XX to XX/XX/XX (XX-1)th Week COMPLIANCE PERIOD: From XX/XX to XX/XX/XX (XX)th Week RELATED AUXILIARY TABLES: 1, 2, 4, 6, 7, 8 and 9 (Values in AOA) INSTITUTIONAL SECTOR COEFFICIENT BASIC ACCOUNT AMOUNT CENTRAL GOVERNMENT IN NC 22% 2.10.10. Demand Deposits 0.00 2.10.20. Time Deposits 0.00 2.10.80. Other Deposits 0.00 2.50.20.10.Liabilities for Pending Settlement Operations 0.00 TOTAL LIABILITY 0.00 LOCAL GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS IN NC 22% 2.10.10. Demand Deposits 0.00 2.10.20. Time Deposits 0.00 2.10.80. Other Deposits 0.00 2.50.20.10.Liabilities for Pending Settlement Operations 0.00
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