Directive No. 4/DSB/95: Monetary Readjustment for Financial Institutions

DIRECTIVE NO. 4/DSB/95
SUBJECT: FINANCIAL INSTITUTIONS
MONETARY READJUSTMENT
Pursuant to the Monetary Readjustment Law, the new Monetary Unit, the Adjusted Kwanza (KZR), equivalent to 1,000 (one thousand) New Kwanzas, was created. Thus, in accordance with Instruction No. 2/95 of June 23, all Financial Institutions shall, as of July 1 of the following year, convert all their values and balances expressed in New Kwanzas to Adjusted Kwanzas, including those of off-balance sheet accounts. Any necessary rounding shall be performed to the lower unit.

To standardize the procedures to be adopted, the following is established:

1. The following accounts are created:
   5999 - Monetary Readjustment - Conversion Position 39940 - Monetary Readjustment - National Treasury
2. As of June 30, all Financial Institutions shall close their books in New Kwanzas by offsetting the accounts indicated in the preceding number.
   a) Example, considering that the balance of the account "Demand Deposits at the Central Bank M/N" is NKZ: 953.007.415.112.30.

DEBIT
Monetary Readjustment - Conversion Position
NKZ: 953.007.415.000.00
Monetary Readjustment - National Treasury

NKZ: 112.30

CREDIT
Demand Deposits at the Central Bank M/N NKZ: 953.007.415.112.30 b) Example, considering that the balance of the "Special Reserve" account is NKZ:
17.515.426.972.40
DEBIT
Special Reserve
NKZ: 17.515.426.972.40 .
CREDIT
Monetary Readjustment - Conversion Position
NKZ: 17.515.426.000.00

Monetary Readjustment - National Treasury
NKZ: 972.40
3. Once the ledger is balanced in New Kwanzas, as exemplified, all accounts shall be reopened in Adjusted Kwanzas (KZR) through account 5999 - "Monetary Readjustment - Conversion Position".
Using the examples from the preceding number a) DEBIT.

Demand Deposits at the Central Bank MIN
NKZ:953.007.415.00
CREDIT
Monetary Readjustment - Conversion Position
NKZ: 953.007.415.00

b) DEBIT
Monetary Readjustment - Conversion Position
KZR: 17.515.426.00
CREDIT
Special Reserve
KZR: 17.515.426.00
4. The final balance of account "39940 - Monetary Readjustment - National Treasury" shall be transferred, in Adjusted Kwanzas, to the BNA, through the account "Demand Deposits at the Central Bank M/N.
5. Upon confirmation of transit values, immediate conversion shall be carried out by stamping the documents with the wording "Adjusted Kwanza", recording the new value in red on the document. The residual value supporting the reopening of books in Adjusted Kwanzas shall be properly preserved in a specific archive.
DIRECTORATE OF BANKING SUPERVISION