Instruction No. 05/2018 of May 25 on Monetary Policy - Mandatory Reserves — BNA — AO

INSTRUCTION NO. 05/2018
May 25
SUBJECT: MONETARY POLICY

Mandatory Reserves

It being appropriate to update the existing rules for the calculation and compliance of Mandatory Reserves to the current macroeconomic stability framework, with a view to greater efficiency of monetary policy instruments;

In the exercise of the powers conferred upon me by Article No. 51 of Law No. 16/10, of July 15, the Law of the Bank of Angola.

I DETERMINE:

Banking Financial Institutions established in the country must maintain mandatory reserves in accordance with this Instruction.
The incidence base for mandatory reserves, in national currency, consists of the amounts recorded according to auxiliary tables (1, 2, 4, 6, 7, 8 and 9) in the following accounts of the Chart of Accounts of Financial Institutions (CONTIF ADJUSTED):

2.10.10. Demand Deposits;
2.10.20. Time Deposits;
2.10.80. Other Deposits;
2.10.90. Other Loans;

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2.20.20. Sale of Own Securities with Repurchase Agreement Operations;
2.20.30. Sale of Third-Party Securities with Repurchase Agreement Operations;
2.30.10. Securities and Financial Instruments Issued or Endorsed;
2.50.20.10. Obligations from Pending Settlement Operations;
2.50.20.30. Obligations for Tax Collection Services.

The incidence base for mandatory reserves, in foreign currency, consists of the amounts recorded according to auxiliary tables (1, 2, 4, 6, 7, 8 and 9) in the following accounts of the Chart of Accounts of Financial Institutions (CONTIF ADJUSTED):

2.10.10. Demand Deposits;
2.10.20. Time Deposits;
2.10.80. Other Deposits;
2.10.90. Other Loans;
2.20.20. Sale of Own Securities with Repurchase Agreement Operations;
2.20.30. Sale of Third-Party Securities with Repurchase Agreement Operations;
2.30.10. Securities and Financial Instruments Issued or Endorsed;
2.50.20.10. Obligations from Pending Settlement Operations;
2.50.20.20. Relations with Correspondents;
2.50.20.30. Obligations for Tax Collection Services.

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For the purposes of this Instruction, the balances of Bankita accounts, demand and time deposits in national and foreign currency, and all monthly interest from the incidence base defined in numbers 2 and 3 of this Instruction, are not eligible for the calculation of mandatory reserves.
Balances referring to the daily closing of the national currency demand deposit account, opened at the Bank of Angola in the name of each Banking Financial Institution, are eligible for compliance with mandatory reserves in national currency.
The following assets are eligible for compliance with mandatory reserves in foreign currency:
a. 20% (twenty percent) with the balance of the foreign currency deposit account opened at the Bank of Angola in the name of each Banking Financial Institution; b. 80% (eighty percent) with Treasury Bonds in foreign currency belonging to the own portfolio registered in SIGMA, issued from 2015 onwards.
The calculation of mandatory reserves and their compliance are carried out weekly, on the first business day and from the first to the last business day of the week following the week in which the balances referred to in numbers 5 and 6 were constituted, respectively.
The incidence base defined in numbers 2 and 3 of this Instruction is subject to the following mandatory reserve coefficients:
8.1. The mandatory reserve coefficient to be applied to the daily balances of the items composing the incidence base defined in number 2, excluding the accounts of the Central Government, Local Governments and Municipal Administrations, is 19% (nineteen percent).

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8.2. The mandatory reserve coefficients to be applied to the daily balances of the Central Government accounts - NC is 75% (seventy-five percent) and to the balances of Local Governments and Municipal Administrations - NC is 50% (fifty percent).
8.3. The mandatory reserve coefficient to be applied to the daily balances of the items composing the incidence base defined in number 3, excluding the accounts of the Central Government and Local Governments and Municipal Administrations, is 15% (fifteen percent).
8.4. The mandatory reserve coefficients to be applied to the daily balances of the Central Government accounts - FC is 100% (one hundred percent) and to the daily balances of Local Governments and Municipal Administrations accounts - FC is 100% (one hundred percent).

The liability for the incidence base in national currency, subject to the coefficient of 19% (nineteen percent), is calculated weekly on the arithmetic mean of the balances determined in the respective accounts on business days of the week, following the following formula:

ETn = crn {∑ [Dtn (T –1)]/N}
Where:
ETn = liability of week T in NC, corresponding to 19% (nineteen percent) on the incidence base, excluding the accounts of the Central Government, Local Governments and Municipal Administrations;
crn = mandatory reserve coefficient corresponding to 19% (Nineteen percent);
T = T-th calendar week in which the compliance of mandatory reserves occurs, (T=1, 2, 3,...,52);

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T-1 = T-th calendar week in which the constitution of the final daily credit balances registered in the incidence base accounts referred to in point 8.1 occurs, (T-1=-52, 1, 2,..., 51);
t = business day of the constitution week T-1;
Dtn (T – 1) = final daily credit balances registered in the incidence base accounts referred to in point 8.1, reported on the first business day of the compliance week;
N = number of business days of week T-1.

The liability for the incidence base in foreign currency, subject to the coefficient of 15% (fifteen percent), is calculated weekly on the arithmetic mean of the balances determined in the respective accounts on business days of the week, following the following formula:

ETe = cre {∑ [Dte (T –1)]/N}
Where:
ETe = liability of week T in FC corresponding to 15% (fifteen percent) on the incidence base excluding the accounts of the Central Government, Local Governments and Municipal Administrations;
cre = mandatory reserve coefficient corresponding to 15% (fifteen percent);
T = T-th calendar week in which the calculation of mandatory reserves occurs, (T=1, 2, 3,..., 52);
T-1 = T-th calendar week in which the constitution of the final daily credit balances registered in the incidence base accounts referred to in point 8.3 occurs, (T-1= -52, 1, 2, ..., 51);
t = business day of the constitution week (T-1);

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Dte (T – 1) = final daily credit balances registered in the incidence base accounts referred to in point 8.3, reported on the first business day of the compliance week;
N = number of business days of week T-1.

For the purposes of this Instruction, business days are considered to be the days of the week, excluding Saturdays, Sundays and national holidays.
The amount up to 5% (five percent) of the weekly arithmetic mean of the final daily balances, determined in account 1.10.10 National Currency Cash of the Chart of Accounts of Financial Institutions (CONTIF ADJUSTED), of the constitution week, may be deducted from the liability in NC calculated in accordance with point 8.1 of this Instruction. For this purpose, the values of checks returned by the clearing service must not be computed.
Furthermore, the amount of 80% (eighty percent) of the Assets representing the value of disbursements of NC credits granted to projects in the sectors of agriculture, livestock, forestry and fisheries, provided they have a maturity greater than or equal to 24 (twenty-four) months, may also be deducted from the liability in NC calculated in accordance with point 8.1 of this Instruction.
The amount for the purpose of deducting the mandatory reserve, referred to in the previous paragraph, is determined based on the position of the last day of the constitution week of the credit portfolio granted by the Banking Financial Institution registered in the Supervision System of Financial Institutions of the Bank of Angola (SSIF).
The effective value of the reserves to be considered for compliance with the liability in NC is equal to the sum of 75% (seventy-five percent) of the daily balances of the Central Government accounts, 50% (fifty percent) of the daily balances of the Local Governments and Municipal Administrations accounts and the amount referred to in point 8.1, deducted from the amounts established in numbers 12 and 13 according to the following formula:

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ROdn = ∑[GCdn+ (GLdn) + ETn – DCTn - NMn (T-1)]
Where:
ROdn = effective mandatory reserves in national currency to be considered for compliance with the liability on day d;
GCdn = 75% (seventy-five percent) of the daily balances of the Central Government accounts in NC on day d;
GLdn = 50% (fifty percent) of the daily balances of the Local Governments and Municipal Administrations accounts in NC on day d;
ETn = liability in week T in NC, corresponding to 19% (nineteen percent) on the incidence base, as referred to in number 9;
DCTn= value corresponding to 80% (eighty percent) on the position of the last business day of the constitution week of the credit portfolio granted by the Banking Financial Institution to the sectors of agriculture, livestock, forestry and fisheries, provided they have a maturity greater than or equal to 24 (twenty-four) months.
NMn (T-1) = amount up to 5% (five percent) of the arithmetic mean of the final daily balances of account 1.10.10 National Currency Cash in the constitution week (T-1);
d = business day of the compliance week (T).

The effective value of the reserves to be considered for compliance with the liability in FC is equal to the sum of the amount corresponding to 100% (one hundred percent) of the daily positions of the Central Government accounts, the amount corresponding to 100% (one hundred percent) of the daily balances of the Local Governments and Municipal Administrations accounts and 15% (fifteen percent) of the weekly arithmetic mean of the balances of the Incidence Base referred to in point 8.3, according to the following formula:
ROde = ∑[GCde+ GLde+ ETe]

CONTINUATION OF INSTRUCTION NO. 05/2018 Page 8 of 12 Where:

ROde = effective mandatory reserves in foreign currency to be considered for compliance with the liability on day d;
GCde= 100% (one hundred percent) of the daily balances of the Central Government accounts in FC on day d;
GLde = 100% (one hundred percent) of the daily balances of the (Local Governments and Municipal Administrations) accounts in FC on day d;
ETe = liability in week T in FC corresponding to 15% (fifteen percent) on the incidence base, as referred to in number 10;
d = business day of the compliance week (T);

The presentation of data and information regarding the calculation of liability, as well as of assets for its compliance in FC, must be in NC, at the average exchange rate published by the Bank of Angola, in accordance with the provisions of CONTIF ADJUSTED for this purpose. Meanwhile, for the compliance of mandatory reserves in FC, the daily average exchange rate published by the BNA must be considered.
Without prejudice to other measures that may be adopted, the Bank of Angola must apply a sanction equivalent to the product of 1% (one percent) per month, above the highest interest rate currently in force for active operations in national currency, practiced by financial institutions during the period in question, provided for in No. 4 of Article 25 of Law No. 16/10, of July 15, the Law of the Bank of Angola, on the daily insufficiency of mandatory reserves, both in national currency and in foreign currency. The Bank of Angola must, equally, apply the same penalty retroactively, for situations in which Banking Financial Institutions provide data and information that are inconsistent and would imply non-compliance with mandatory reserves in the respective week.

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The collection of charges resulting from the penalties provided for in number 18 of this Instruction is carried out until the last business day of the week following the occurrence, by debit of the demand deposit accounts in national currency with the Bank of Angola, both for non-compliance in NC and for non-compliance in FC. For non-compliance in FC, the equivalence will be made through the exchange rate referred to in number 17 of this Instruction. If, by the end of the deadline, the amount of said penalties is not settled, the Bank of Angola proceeds to compulsory debit in the bank's reserve account.
Banking Financial Institutions must be informed by the BNA whenever there is grounds for the sanctions provided for in number 18 of this Instruction.
The daily balances of the items composing the incidence base defined in numbers 2 and 3 and the accounts of the Central Government and Local Governments in NC and in FC must be transmitted daily to the Payment System Department (DSP) of the BNA through the SSIF.
Contingency Procedures: In case of unavailability of the SSIF, Banking Financial Institutions are obliged to adopt, alternatively, the sending of data via email.
The data referred to in the previous number must be in conformity with the guidelines of CONTIF ADJUSTED and be precise, complete, reliable and verifiable.
Banking Financial Institutions are obliged to conserve and present to the representatives of the Prudential Supervision Department of Financial Institutions (DSI) of the BNA, whenever requested, the documents that allow proving the information provided for the purpose of calculating the liability.
Instruction No. 06/2017, of December 01, and all regulation that contradicts the provisions of this Instruction, are revoked.
This Instruction enters into force on 28/05/2018 for the purpose of constituting the incidence base, with effective compliance of the liability occurring on 04/06/2018.
Doubts in the interpretation and application of this Instruction are clarified by the Payment System Department (DSP).

PUBLISH.
Luanda, May 25, 2018.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

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ANNEX I
ANNEX No. 01 - INSTRUCTION No. 05/2018, of May 25

CALCULATION OF WEEKLY LIABILITY IN NATIONAL CURRENCY AND FOREIGN CURRENCY, EXCLUDING CENTRAL AND LOCAL GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS
BANK : xxxxxxxx
CONSTITUTION PERIOD : From XX to XX (XX-1)th Week RELATED AUXILIARY TABLES: 1, 2, 4, 6, 7, 8 and 9 (Values in AOA) WEEK No. XX WEEK No. XX WEEK No. XX WEEK No. XX 5 days 5 days 5 days 5 days
2.10.10. DEMAND DEPOSITS 0,00
2.10.20. TIME DEPOSITS 0,00
2.10.80. OTHER DEPOSITS 0,00
2.10.90. OTHER LOANS 0,00
2.20.20. SALE OF OWN SECURITIES WITH REPURCHASE AGREEMENT OPERATIONS 0,00
2.20.30. SALE OF THIRD-PARTY SECURITIES WITH REPURCHASE AGREEMENT OPERATIONS 0,00
2.30.10. SECURITIES AND FINANCIAL INSTRUMENTS ISSUED OR ENDORSED 0,00
2.50.20.10. OBLIGATIONS FROM PENDING SETTLEMENT OPERATIONS 0,00
2.50.20.30. OBLIGATIONS FOR TAX COLLECTION SERVICES 0,00
I - WEEKLY TOTAL OF THE INCIDENCE BASE 0,00
II- WEEKLY AVERAGE OF THE INCIDENCE BASE 0,00
III- TOTAL LIABILITY (according to point 9 of Instruction No. 05/2018, of May 25) 0,00 IV - WEEKLY TOTAL OF BALANCES OF ACCOUNT 1.10.10.CASH 0,00 V - WEEKLY AVERAGE OF BALANCES OF ACCOUNT 1.10.10.CASH 0,00 VI - 5% OF THE WEEKLY AVERAGE OF BALANCES OF ACCOUNT 1.10.10.CASH 0,00 VII - CREDIT RIGHTS (80% OF THE BALANCE OF THE LAST DAY OF THE WEEK OF CREDITS ACCORDING TO POINT 13 OF INSTRUCTION No. 05/2018, OF MAY 25) 0,00 VIII=(III-VI-VII) EFFECTIVE WEEKLY LIABILITY (WITHOUT GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS) 0,00
2.10.10. DEMAND DEPOSITS 0,00
2.10.20. TIME DEPOSITS 0,00
2.10.80. OTHER DEPOSITS 0,00
2.10.90. OTHER LOANS
2.20.20. SALE OF OWN SECURITIES WITH REPURCHASE AGREEMENT OPERATIONS 0,00
2.20.30. SALE OF THIRD-PARTY SECURITIES WITH REPURCHASE AGREEMENT OPERATIONS 0,00
2.30.10. SECURITIES AND FINANCIAL INSTRUMENTS ISSUED OR ENDORSED 0,00
2.50.20.10. OBLIGATIONS FROM PENDING SETTLEMENT OPERATIONS 0,00
2.50.20.20. RELATIONS WITH CORRESPONDENTS 0,00
2.50.20.30. OBLIGATIONS FOR TAX COLLECTION SERVICES 0,00
I - WEEKLY TOTAL OF THE INCIDENCE BASE 0,00
II- WEEKLY AVERAGE OF THE INCIDENCE BASE 0,00
III- TOTAL LIABILITY (according to point 10 of Instruction No. 05/2018, of May 25) 0,00 IV=(III) EFFECTIVE WEEKLY LIABILITY (WITHOUT GOVERNMENTS AND MUNICIPAL ADMINISTRATIONS) 0,00 STAMP AND SIGNATURE OF THE RESPONSIBLE IN FOREIGN CURRENCY COMPLIANCE PERIOD : From XX to XX (XX)th Week IN NATIONAL CURRENCY INCIDENCE BASE

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ANNEX II
ANNEX No. 02 - INSTRUCTION No. 05/2018, of May 25

LIABILITY ON CENTRAL GOVERNMENT, LOCAL GOVERNMENTS (Provinces) AND MUNICIPAL ADMINISTRATIONS
BANK : XXXXXXX
DATE : XX-XX-2018
RELATED AUXILIARY TABLES: 1, 2, 4, 6, 7, 8 and 9 (Values in AOA) INSTITUTIONAL SECTOR
2.10.10. Demand Deposits 0,00
CENTRAL GOVERNMENT IN NC 2.10.20. Time Deposits 0,00 75% 2.10.80. Other Deposits 0,00
2.50.20.10. Obligations from Pending Settlement Operations 0,00
TOTAL LIABILITY 0,00
2.10.10. Demand Deposits 0,00
LOCAL GOVERNMENTS AND MUNICIPAL 2.10.20. Time Deposits 0,00 ADMINISTRATIONS IN NC 50% 2.10.80. Other Deposits 0,00
2.50.20.10. Obligations from Pending Settlement Operations 0,00
TOTAL LIABILITY 0,00
2.10.10. Demand Deposits 0,00
CENTRAL GOVERNMENT IN FC 2.10.20. Time Deposits 0,00 100% 2.10.80. Other Deposits 0,00
2.50.20.10. Obligations from Pending Settlement Operations 0,00
TOTAL LIABILITY 0,00
2.10.10. Demand Deposits 0,00
LOCAL GOVERNMENTS AND MUNICIPAL 2.10.20. Time Deposits 0,00 ADMINISTRATIONS IN FC 100% 2.10.80. Other Deposits 0,00
2.50.20.10. Obligations from Pending Settlement Operations 0,00
TOTAL LIABILITY 0,00
STAMP AND SIGNATURE OF THE RESPONSIBLE
COEFFICIENT BASIC ACCOUNT AMOUNT

Instruction No. 05/2018 of May 25 on Monetary Policy - Mandatory Reserves

Lineage: Superseded

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