Notice No. 12/2018 of December 21 on Foreign Exchange Position Limit

Published in the Official Gazette, Series I, No. 189, of December 21, 2018 NOTICE NO. 12/2018 SUBJECT: EXCHANGE RATE POLICY

• Foreign Exchange Position Limit

Whereas it is necessary to update the regulation on the daily foreign exchange position limit of Commercial Banks; Considering the relevance of establishing the operating rules for the foreign exchange position limit, in order to regulate the relationship between the Banco Nacional de Angola, in exercising its functions as manager of external reserves, with Commercial Banks authorized to conduct foreign exchange trading. In these terms, and 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 – Banco Nacional de Angola Law, letter l) of paragraph 1 of Article 90.º of Law No. 12/15, of June 17, Framework Law of Financial Institutions, and Article 12.º of Law No. 5/97 of June 27 – Exchange Rate Law. I DETERMINE:

Article 1.º (Subject Matter)
This Notice establishes the global foreign exchange position limit of Commercial Banks and its calculation basis.

ARTICLE 2.º (Scope)

CONTINUATION OF NOTICE NO. 12/2018 Page 2 of 4 This Notice applies to Commercial Banks, hereinafter abbreviated as Banks.

Article 3.º (Definitions)

1. For the purposes of this Notice, it is understood that:
   1.1 Net foreign exchange position: results from the algebraic sum of the following elements, positive or negative:
   a) Net spot position: the difference between assets and liabilities, in each currency; b) Net forward position: the difference between resources to be received and paid regarding foreign exchange transactions on a forward basis; c) Global foreign exchange position: the algebraic sum of net foreign exchange positions held in various foreign currencies, converted to Euros (EUR), which may be long or short.
2. For the purposes of this article, the elements contained in the daily foreign exchange position statement shall be considered, as established in specific regulations.

Article 4.º (Limit for Foreign Exchange Position)

1. Banks must observe, daily, a global foreign exchange position that does not exceed 5% (five percent) of their Regulated Own Funds (ROF), regardless of whether the position is long or short.
2. For compliance with the preceding paragraph, ROF ascertained at the close of the previous month shall be considered.
3. Banks must sell any excess foreign exchange position in the interbank foreign exchange market or to the Banco Nacional de Angola immediately after submitting the statement, as provided in points 9 and 10 of Directive No. 07/2018 on Daily Foreign Exchange Position Limit.

CONTINUATION OF NOTICE NO. 12/2018 Page 3 of 4
Article 5.° (Calculation Basis)

1. Foreign currency assets and liabilities shall be considered at their net book value, provided they were constituted in foreign currency.
2. Funds earmarked for letters of credit shall not be considered for the purpose of determining the foreign exchange position limit.

Article 6.° (Conversion)

1. The foreign exchange position shall be ascertained in EUR.
2. For the purposes of the preceding paragraph, when converting foreign exchange positions in different currencies to EUR, 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 also be applied when converting ROF from Kwanzas to EUR.

ARTICLE 7.° (Information Elements)

1. The statement of foreign exchange transactions at the close of each day shall be submitted to the Banco Nacional de Angola, in accordance with specific regulations.
2. Banks must maintain separate archives of supporting documentation for their respective daily foreign exchange positions, in accordance with prevailing legislation.
3. The Banco Nacional de Angola may establish complementary guidelines to this Notice, as well as request additional information it deems necessary in fulfilling its mission.

CONTINUATION OF NOTICE NO. 12/2018 Page 4 of 4
Article 8.º (Penalties)
Non-compliance with this Notice constitutes a regulatory offense provided for and punishable under Law No. 12/15, of June 17, Framework Law of Financial Institutions.

Article 9.º (Doubts and Omissions)
Doubts and omissions arising from the interpretation and application of this Notice shall be resolved by the Banco Nacional de Angola.

Article 10.º (Repealing Provision)
Notice No. 06/2018, of August 15, and any legislation contrary to this Notice are hereby repealed.

Article 11.º (Entry into Force)
This Notice enters into force on January 2, 2019.
PUBLISHED.
Luanda, December 3, 2018.
THE GOVERNOR
JOSÉ DE LIMA MASSANO