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Banco Nacional de Angola

Banco Nacional de Angola Avenida 4 de Fevereiro, 151 CP nº 1243 Luanda, República de Angola Fax: + 244 222 390579 Tel: + 244 222 339934/336664

1. History

After Angola gained independence in 1975, the banking sector was nationalised and two major Angolan banks, namely Banco de Angola and Banco Commercial de Angola, changed their names to Banco Nacional de Angola (BNA) and Banco Popular de Angola (BPA) respectively. The BNA, according to the Organic Law 69/76, inherited the responsibilities of a central bank, bank of issue and commercial bank, as well as of being the only legal holder of foreign currency and responsible for all foreign transactions. In 1988, the government introduced a programme to transform the socialist centralised economy into a market-oriented economy. These changes also required the transformation of the banking sector, including the restriction of the BNA's role to being solely responsible for monetary policy and acting as issuing bank, banker of the Government and reserve bank. This was achieved by promulgating the new Organic Law 4/91, of 20 April, which transformed the BNA into a central bank.

The opening of the economy for a liberal system of market, had induced to the necessity of deep alterations in the functional philosophy of the BNA, on the other hand, and of the economic Management of the country, on the other hand, from there elapsing, a redefinition of the functional and executive attributions of the BNA while Central banking, Bank of issue and exchange authority of the country. In the scope of the reorganization of the banking system, the approval in July of 1997, for the Parliament Assembly of the new Organic Law of the National bank of Angola, - Law n° 6/97, of 11 of July, and the exchange Law - Law n° 5/97, of 11 of July, had allowed that some embarrassments of legal origin were exceeded, being the BNA as Central banking, competed of bigger responsibility and autonomy stops with bigger property leading and executing the monetary and exchange politics in the country.

The banking activity in Angola until then conducted by Law n° 5/91, of 20 of April - Law of the Financial Institutions - and, a time that of that date to this part, the

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Angolan financial system knew a gradual associated structural transformation to the sprouting of new institutions, meeting therefore out of time, advised to the reform of its legal picture in combination with the political and economical alterations in course. It is thus that in 1999, a new Law of the Financial Institutions is promulgating - Law n° 1/99, of 23 of April - that regulates the process of establishment, the exercise of the activity, the supervision and the sanitation of the financial institutions and the financial societies. Law 1/99 attributes to central banking in the chapter of the authorization of constitution of the related institutions and proceeds to the reclassification from the same ones.

Dated on 30 September 2008 financial systems activities were segregated in banking and non banking institutions. Law 12/05, established the legal framework for non banking institutions, under regulation and supervision by Capital Market Commission (CMC- Comissão de Mercados de Capitais). Law 13/05, which revoked Law 01/99 dated on 20 of April, established the new framework for banking institutions, under regulation and supervision by Banco Nacional de Angola (BNA). Both Law are dated on 30 September.

2. Relationship with government

The independence of the BNA is guaranteed by the Organic Law (4/91), reviewed by the Law 06/97 of July, which established it in the form of a public company owned by the government with administrative and financial autonomy and independence, and states that the BNA is the monetary and foreign exchange authority of the Republic of Angola. However, it states that in realisation of its objectives, the BNA shall respect the economic policy defined by the government; in practice there is co-ordination between the central bank, Ministry of Planning and the Ministry of Finance for the determination of monetary and foreign exchange policies.

The President of the Republic appoints the Governor. The Deputy Governor is also appointed by the President of the Republic under the Governors proposal, for a period of five years, in terms of section 1, Act 51 of the Law 6/97. The BNA Board comprises the Governor, the Deputy Governor and three to five General Directors. The Governor and the Deputy Governor are not members of the Cabinet, but they participate in its meetings. The Cabinet on recommendation from the Governor, for a five-year period, appoints General Directors on the Board. They can only be dismissed for a serious reason.

The BNA has the Audit Council and the Council of Consultants. The Audit Council comprises of three members, two appointed by the Ministry of Finance and one appointed by BNA staff, for a period of three years. The Council of Consultants is

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comprised of the Deputy Governor, all ex-Governors, the Audit Council chairperson and four executives with proven banking, financial, planning and economic experience.

The BNA has its own budget and decides on its own finances as approved by the Board.

According Law 06/97, BNA is responsible for the formulation and execution of monetary and foreign exchange policies. Such policies are made through the annual financial programming and a quarterly re-programming, approved by the Banks Board, in line with the governments economic policy.

The Banks main functions are to: - Promote and maintain monetary and financial stability; - act as banker of government; - issue of banknotes and coin; - ensure an efficient payment system; - advise the government on monetary, financial and foreign exchange matters; - act as an intermediary on international monetary government relationships; - act as lender of last resort; - manage international country reserves; and - ensure a sound financial system.

The BNA administers the Treasury account (collects tax revenue and effects payments on behalf of government). The Bank advises the Government on formulating the budget in line with the annual financial programme to guarantee co-ordination between the fiscal deficit and central bank credit and international reserves management. The central bank also participates in international negotiations dealing with loan contracting and consequently with debt-servicing arrangements.

The BNA also acts as the alternate Governor at financial institutions, namely the International Monetary Fund, the World Bank group and the African Development Bank.

The BNA must grant credit to the government up to the amount of the government deficit as approved by the Parliament. In this case, the Treasury Department of the Ministry of Finance issues Treasury bills for the amount required to be financed and remits them to the BNA.

According Law 06/97, Additionally the BNA is allowed to extend credit to the government’s current account, up to an amount not exceeding 10 per cent of the

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governments ordinary revenue collected in the previous year. The credit has to be settled during the same fiscal year.

The Bank is state-owned and the Government of Angola is the sole shareholder of the National Bank of Angola. The Organic Law 6/97 states that at least 60 per cent of the BNA s net revenues should go to the government. In terms of development financing, the implementation of financial activities requires, according to the Banks Law 1/99 dated 23 April, legal authorization provided by the BNA on a case-by-case basis. However, for financial institutions with over 20 per cent of non-resident owned equity, such approval is a competence of the Ministry of Finance with the prior approval of the central bank. Law 13/05 dated 30 September which revoked Law 01/99 dated on 20 of April, attributed competence of Council of Minister for authorization for financial institutions with over 20 per cent of non-resident owned equity.

3. Design and conduct of monetary policy

3.1 Main objectives of monetary policy

The main objectives of monetary policy in Angola, consistent with the goal of the government’s economic policy, are to achieve stable national currency unit and price stability.

3.2 Instruments of monetary policy

The BNA utilises direct as well as indirect monetary instruments. Since 1992 the BNA has used mostly direct instruments, such as credit controls, interest rate ceilings, as direct and indirect instruments such as reserve requirements and a rediscount rate. In the scope of monetary liberalisation, interest rates have been liberalised and the central bank started the issuance of central bank bills (TBC), in June 1999. Its introduction widened the set of instruments for monetary intervention available to the central bank and allowed a gradual reliance in direct instruments of monetary policy.

The main instruments of monetary policy are: - Reserve requirements. - Central Bank Bills (TBC) issues for liquidity regulation; - Foreign currency selling for liquidity regulation; - Rediscount rate, which is periodically adjusted in line with inflation developments; - Open market-type operations, not used actually due the context of Central Bank Bills issuing;

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3.3 Types of refinancing as well as collateral used

As lender of last resort, according to the Organic Law 6/97, the BNA may extend credit facilities for no more than three months to financial institutions to cover liquidity shortage problems. Collateral requirements for these loans are the following: - Treasury bills or Bonds; - Central Bank Bills; - Assets that the bank is authorized to buy, sell or transfer; - Other credit bills issued and guaranteed by the State - public issue; and - invoice vouchers, "warrant" and other bills of the same kind.

3.4 The money supply aggregate that plays the main role in monetary policy

The M2 aggregate is the most important of the money supply aggregates and its control plays a major role in monetary policy, and is a control variable in monetary programming.

Base Money is the operational aggregate is the variable for control money supply in monetary programming.

3.5 Reserve requirements on financial institutions

All banking institutions maintain deposits in the central bank, in the form of reserve requirements. Reserve requirements are extended to demand deposits in local and foreign currency in the banking institutions operating in Angola’s financial system. The present requirement is 15 per cent of the weekly average balance of demand deposits in local and foreign currency collected in domestic currency. Banks may maintain up to 7,5 per cent of reserve requirements in Central Bank Bills (TBC’s) or Treasure Bills with maturity up 63 days.

By Act/08/2009 dated 21 May reserve requirements is 30 per cent of weekly average balance of demand deposits in local and foreign currency collected in domestic and currencies. Banks may maintain up to 10 per cent of reserve requirements in Treasury Securities (Treasury Bonds or Bills) or Central Bank Bills (TBC), also both in domestic or foreign currency.

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4. Structure of the financial markets

4.1 Organization of the money and capital markets

Money market Angola’s money market is emerging, in June 1999, central bank bills (TBC) auctions were introduced by the central bank. They are issued periodically by the central bank to absorb excess liquidity in local currency in the domestic banking system. So far, this instrument works only in the primary market. TBC bills range in maturity from 14 days to 364 days, and the interest rate is fixed by central bank and periodically adjusted or determinated by auction.

In July 2007 the issue of Treasury bills with range in maturity from 28 to 364 days started to be issued in money market.

Capital market Created a Commission of the Capital market (CMC) by the Council of Ministries under the decree nº 9/05 on 18th March 2005 published at the Daily Republic paper. The Commission of the capital market is conducted by Law 12/05 dated 30 September, Law of Movable Values, Financial Institutions, Organic Status, as well as for its Internal Regulation.

The stock market is expected to start in a near future.

4.2 Instruments used in both these markets

There is only a short-term money market instrument - the central bank TBC bills. Actually, there are short, medium and long term instruments used in monetary market. Treasury bills and central as short term and Treasury Bonds as medium and long term. Act 51/03 and 52/03 establish the legal framework for Treasury Bonds and Treasury Bills issuance, based on Law 16/02, dated 5 December, which establish the general framework for Government debt. A set of additional rules the operational framework for money market transactions.

4.3 Legal frameworks existing for the money and capital markets

The following acts deal directly with the financial system: - Central Bank Organic Law 06/97 provides autonomy for the BNA to issue and negotiate its own bills or other institutions’ bills; - Financial Institutions Law 13/05 dated 30 September, defines the areas in which banking institutions and exchange agencies can operate; and

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- Law 13/05 dated 30 September establish the areas in which non banking institutions can operate; - Central Bank Legislation: Notice 05/2004, dated 24 September defines the framework for the issuance of central bank TBC bills.

4.4 Types of financial intermediaries operating in these markets

At the moment there are 19 banks in Angola of which:

Commercial banks: - BPC, BCI, which are state owned banks; - BTA, BFA,VTB, BPA, BESA, BANC,BNI, BIC, BCA, BMA, BRK,FINIBANCO, BQUANTUM,

Investment banks: - One is an investment bank - BAI; - One is a Development bank- BDA

Universal and micro-credit bank: - Two are micro credit banks – Bank Sol and NVBanco

All the banks are fully licensed, but some of them are more focused to some activities e.g. micro-credit and investment bank, but all are universal banks.

Offices representing foreign banks: Tentative offices of BNP Paribas Bank, Equator Bank, Banco Rural Europe, Bank of Brazil and Standard Bank of South Africa.

Exchange Bureaux

- Twenty-one Exchange Bureaux of which six are operating;

- According to the BNA regulations about the banking cards under decree nº01/07 of 21 March, It has been introduced the Credit Card (Visa), which is now operating and is providing efficient and convenient payment solutions adapted to customers.

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5. External payment arrangements

5.1 Determination of the exchange rate policy

The BNA is responsible for the formulation and execution of foreign exchange policy in Angola. Since 21 May 1999, Angola has been using a market-determined exchange rate.

5.2 The present exchange rate system

At present, Angola is using a free-floating exchange rate system.

5.3 Organising the exchange market

The Banco Nacional de Angola is the sole state authority for administering exchange control in Angola. Banks and foreign exchange dealers, licensed by BNA, are authorized to deal among themselves and with their customers at freely negotiated rates, namely for import/export proceeds and invisibles.

The Banco Nacional de Angola intervenes from time to time to promote orderly conditions in the foreign exchange market. The participants in the inter-bank foreign exchange market are the central bank and the banks. BNA publishes daily a reference rate, for accounting and statistical purposes, computed as a weighted (by quantities), average rate of the rates dealt with during the day, by banks.

Other measures were taken in the foreign exchange domain regarding the maintenance of export proceeds in the Angolan banking system, namely the abolition of part of the specific exchange prerogatives for the mining sector. Various previous restrictions on foreign exchange operations were relaxed; credit in foreign exchange is permitted to exporters, an incentive for exports; imports of goods and services with resources in own funds in foreign exchange are now permitted.

5.4 The central bank's involvement in managing foreign exchange reserves

The BNA acts as manager of the country's gold and other foreign exchange holdings. The BNA also establishes the maximum permissible foreign exchange limits that banks and exchange bureau may hold.

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6. Currency convertibility and exchange control

6.1 Current state of currency convertibility

The domestic currency (kwanza-Kz) is not convertible, neither internationally nor regionally.

6.2 Exchange control on current account transactions

Almost all current account transactions have been liberalized, but capital operations are subject to previous exchange licensing by BNA. All invisible operations above US$ 500 000,00 are subject to the previous exchange licensing by BNA.

Due the effects of international financial crisis is Angolan economy that requirement changes. Invisibles transactions above US$100.000,00 are subjected to licensing process by Banco National de Angola.

With regard to payments for invisibles, exchange allowances for medical treatment abroad, is provided through restrictions in the terms of the transitory regimen of Section 2 of Article XIV, and limits to the foreign currency for certain chain operations invisible, also for expenditures (business, education, cultural scientific, health and private travel).

Exchange allowances for private travel abroad on business, for education and fellowship are granted, up to US$15 000,00 per person, allowing being 4 times per year, upon the presentation of a passport with entry visa for the country of destination and airline tickets.

Foreign exchange bureau licensed to operate may deal only in banknotes and traveller's checks, being authorized to execute current invisible operations of a private nature (business, education, cultural scientific, health and private travel).

National residents are allowed to travel abroad without any requirements if the amount of foreign currency does not exceed US$15 000,00. The travel agent should present proof of purchase of foreign exchange from a local institution and authorized dealers. Non-residents are permitted to enter the country with any amount in foreign exchange.

All imports and exports of merchandise (goods) have been liberalized and no longer need a license from the Ministry of Commerce.

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Exports of arms and ammunition and ethnological collections are prohibited. Special export regimes apply to aircraft, animals and animal products, historical objects and petroleum. Re-exports of goods other than capital goods and personal belongings are also prohibited.

Exporters are required to sell to the BNA (oil companies) and banks a portion of their export receipts destined for compliance with their fiscal obligations and local expenses, respectively, and may retain the remain to cover production costs.

6.3 Restrictions on capital account transactions

Regarding restrictions applying to inward capital-account transactions, the Foreign Investment Law now called “ LEI DE BASES DO INVESTIMENTO PRIVADO” Law nº 11/03 dated 13 May that revoke the Law No 15/94 of 23 September, prohibits investment in some strategic sectors as defense and security. Direct investment in the oil sector is encouraged. With the prior approval of the Ministry of Finance capital may be repatriated upon liquidation. Dividends are annually transferable after approval by BNA. Transfers of personal capital, such as legacies, dowries, savings from wages and salaries, and proceeds from the sale of personal property, are permitted only after assessing the merits of the individual case. All capital transfers are subject to licensing and control.

6.4 Retention rules for foreign exchange earned and owned by residents

Individual residents who are juridical persons may maintain demand and fixed-term foreign exchange accounts with Angolan financial institutions. These accounts earn interest at current interest rates. Cheque books may not be issued for these accounts. The opening of and transactions through these accounts are not subject to prior authorisation from the BNA. These accounts may be credited only through the delivery of foreign exchange currency in cash, traveller’s cheques or foreign payment orders. The accounts may be debited for the issuance of any instrument normally accepted on the international financial market in settlement of bills for imports of goods and current invisible or capital export operations carried out by the depositor. Transfers among accounts are allowed.

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7. The Central Bank and external debt

7.1 The role of the central bank in managing the country's external debt

The Banco Nacional de Angola as a central bank, accepts the full responsibility for recording the external debt of Angola. Its mission therefore includes the collecting, processing and interpretation of debt statistics. The BNA is also a participant in a centralised group responsible for debt management and chaired by the Minister of Finance.

7.2 The role of Treasury in this respect

The Treasury acts as a representative of the government in loan-contracting negotiations and also acts as unique state authority in choosing the loan's potential ownership. However, in order to maintain inflation at low levels and to exercise better control over liquidity, the Treasury works in close co-operation with the central bank in contracting loans.

8. Supervision of financial institutions

8.1 Banking institutions

8.1.1 Authority responsible for banking supervision

In Angola, the Banco Nacional de Angola is responsible for all banking institutions supervision through its Banking Supervision Department.

8.1.2 The licensing procedures for establishing a new bank

The licensing procedures for establishing a new bank in Angola consist of the following two steps:

Step 1: Special authorization Special authorization entails the following: - The request for establishing a new bank is submitted to the BNA. Approval for the creation of Angolan banks is given by BNA, on a case-by -case basis, after the assessment of all the procedural conformity with the policy and requirements defined under section I of the Banking Act 13/05 from September 30th 2005. - For the establishment of a new bank with more than 20 per cent of foreign capital invested, approval must be submitted to Cabinet, after BNA agreement.

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- The framework of the administrative process uses the following criteria in the authorization process: - the objectives of the bank should be in accordance with the country’s monetary and financial policies; - the bank’s management must be competent and have relevant experience; - the bank should be in a position to improve its diversification and servicing quality rendered to the public, as well as to provide adequate protection for deposits held in its accounts; - technical and financial resources must be sufficient for the kind of operations envisaged; - the institutional development outlook should be compatible with the maintenance or organized market competition; - Authorization to establish a financial institution may not be transferred from one institution to another.

Step 2: Constitution of the bank The Organic Law decrees that no financial institution may be granted authorization to commence banking activities without complying with the following conditions: - a technical feasibility study shall be done for the proposed financial institution; - shareholders shall be identified personally and professionally as well as respective number of shares owned by each; and - the major shareholders as well as the proposed members of the financial institution's management board shall have the required competence and technical capacity.

8.1.3 Type of licenses that exist

There is only one full banking license in Angola.

8.1.4 Minimum capital requirements for the different types of banks

Updated at the end of each foreseen exercise, Aviso No 4/07 from September 26th 2007. Own currency: equivalent to US$8 million. That amount may be reduced by 50 per cent in a case where the new bank’s head is office established in any province other than the capital.

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8.1.5 Regulations governing current activities of banks - Large credit exposure: The concept of Large Credit Exposure is aimed at credit operations which exceed 10 per cent of bank assets. The sum of major credit risk is limited to three times the value of net bank assets. The BNA regulation "Aviso no. 5/96 of 26 April" governs large credit exposure.

- Capital adequacy: According to the BNA's "Aviso no. 4/07 from 26 September 2007" banking institutions aiming at constituting a commercial operation require banks to have a capital adequacy of a minimum of US$8, 000, 000.00 or equivalent in own currency. If the commercial banks head office is to be out of Luanda, this requirement can be reduced by 50 per cent. The BNA`S Aviso no. 5/99" authorizes the banking institutions to realize credit operations with exporters in foreign currency.

- Reserve requirement ratio. The bank regulation Instructive no. 02/00" of 13 March, defines the requirement regime in which it is established. Institutions subjected to the regime of reserve requirements include all financial institutions operating in the country, which are permitted to collect deposits. The coefficient of reserve requirements is 30 per cent of a weekly average balance of demand deposits in local currency.

- Provision for bad debts: The BNA's "Aviso no. 4/92 of July" decrees the minimum level of provision that may be made by financial institutions to cover bad debts or any other risk inherent in their activities.

- Restricted lending: According to the monetary programming, quarterly ceilings are set on the Net Domestic Assets (NDA) of the banking system. A global ceiling on NDA is derived as a residual between the M2 of the banking system and the NFA of the banking system. The ceilings on NDA by banks are calculated as a residual between the global NDA of the banking system and the bank NDA. The bank regulation Instructive 6/00 of 25 July, governs the establishment of NDA ceilings.

a) Interest rates

Interest rates have been negotiated between banks and their clients, since May 1999.

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b) Discount operations

The rediscount rate was modified in September 2006 on basis of the decree nº 06/DSP/07 and has reference to the interest rate of the treasury bills with 91days maturity of the visible auction + 5 per cent of the spread.

Deposit insurance: None

8.1.6 Main supervision practices

The two main supervision practices used by the BNA to control banking activities are the following:

Off-site examination The banking industry in Angola has to submit records of the banks’ position for the main accounting aggregates, in own currency (Directive) and in foreign currency (Directive 1/99). Banks are also obliged to submit monthly statistics and quarterly net domestic asset limits. The review of these instruments allows the central bank to determine if the banks have complied with the regulations and prudential directives governing liquidity, credit operations and security assets.

On-site inspections The BNA physically inspects the records of the banks through on-site inspections and external audits. The BNA has special controllers who travel around the country to visit the different banks.

8.1.7 Measures to remedy deficiencies as well as penalties utilized - Comment - Penalties - Partial or total prohibition from undertaking banking activities.

8.2 Non-banking institutions

8.2.1 Responsibility for supervision of non-banking financial - ISS Insurance supervision authority:

8.2.2 Categories of financial institutions and their licensing procedures

Law 1/00 and Decree 6/01 of the Reinsurance and Co-insurance, as well as Decree 25/98, of the Pension funds liberalized the insurance activity.

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Insurance companies: There are five Insurance companies: are already to operate in the market of insurances, for beyond the ENSA - Angolan Insurance Company a state -owned enterprise, the AAA LDA enterprise, AAA Broker of Insurances and the PERITANA (broker), Global Seguros (GS);

Pension funds: Pension Funds: there is one state-owned a veteran pension fund, which is managed by a private manager a ” Fundo de Pensões SARL”, and AAA Fundo de Pensões LDA. The following Managing Societies of Pension fund: the AAA Pensions, SARL; and the Management of Funds, SARL. Gestão de Fundos (GF) The first one is to manage the 3 Funds of Pensions (FP) and last 2 FP.

9. National payment, clearing and settlement system

9.1 How is the payment, clearing and settlement system organized?

The Angolan Payment System Project (SPA - Framework and Strategy of Implementation) was approved in February 2000, and its action plan is being developed.

Currently two systems of the Angola Payment System are organized and functioning: the Values Clearance Service (SCV) and the Settlement for Major Payments System.

The SCV is aimed at the payment of clearable instruments, namely cheques, banker’s draft (OS), transfer order (OT), credit document (DC), document of participant, document of regularization of difference.

To participate in the SCV, the seven commercial banks are obliged to maintain reserve requirements accounts at the BNA and the National Treasury which also has an account at the National Bank of Angola. The National Treasury is represented by the BNA exclusively for the forwarding and receiving of clearable papers.

The SCV operates through local (only one location where the clearing house is situated), regional (locations where the clearing house is situated and surrounding locations, predefined by the BNA) and inter-linked systems (location previously defined by the BNA, served by the transport shared clearable papers).

In the local systems and regional systems, the captive maximum deadline for the clearable papers collected in deposits is two working days, counted from the

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working day immediately after the reception day of the clearable paper. The devolution deadline is the day immediately after the exchange day. In the inter- linked systems the captive maximum deadline for the clearable paper is variable, being fixed accordingly to the frequency of air transport. Four inter-linked systems are installed, for which, coincidentally, a captive maximum deadline of six working days was set.

The netting carried out at the clearing house is settled on the participants accounts maintained at BNA, through credit or debit.

The settlement for Major Payments System, designed specifically for the settlement of buying and selling of central bank securities carried out in the inter- bank market, and for the settlement of the counter-value in domestic currency of the foreign exchange buying and selling effected at the same inter-bank market, is at an early stage. This system has been implemented to avoid transfers that require real time settlement to be built in. Therefore financial settlement in this system is done via crediting and debiting the accounts maintained by commercial banks at BNA, in bulk, in real time.

9.2 What is the role of the central bank in the system?

Currently, besides being the institution where settlements are made, the BNA also operates the SCV and the Settlement for Major Payments System.

The competence of the BNA is organizing, supervising and inspecting the clearing houses, in latu sensu as swaps systems and settlement systems, is foreseen in the BNA`S Organic Law.

9.3 Short description of the processing of payment instructions

Payment instructions are all paper-based. They are physically delivered at the clearinghouse. The processing at the clearinghouse is made through two specific and different kinds of software, one for SCV and one for Settlement for Major Payments System.

9.3.1 Processing in the SCV

A daily clearing session is carried out from Monday to Friday, at 09:00 am.

The clearing routine foresees the direct delivery among participants, in sealed boxes, of the respective clearable papers (on debit, credit, in refund), along with a diskette with an Issuance Summary File and Documents’ Movement File at

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Clearing. On the basis of the information on the diskettes received from the participants, the BNA, by automatic process, does the netting of each participant in the session and sends the results to the relevant sector to be effected on the Reserve Requirements accounts.

The results obtained from the clearing houses installed elsewhere than Luanda are transmitted via satellite (VST), in specific software, on a daily basis until 14:30.

9.3.2 Processing in the Settlement for Major Payments System

On a daily basis, the system remains open from 12:00 to 16:00 hours to enable banks to deliver the respective information, through diskettes, on the settled operations, on the day, in this system.

A double set of information is required for each operation in the settlement. Both the buyer and seller banks must send the information to BNA, and if there is coverage in the Reserve requirements of the debited banks and, in the case of the buying and selling of bills, if the bills are available in the position of the seller bank, the operation is settled in real time, by a command in the processing system.

9.4 How are non-funded positions settled in the system?

It is foreseen that if there is insufficient provision in the bank’s reserves account for the settlement financial result from the Clearing process, the bank must redeem itself with the BNA by means of a rediscount operation, according to its regulations.

In the System of Settlement for Major Payments System, there is insufficient provision in the bank’s reserves account, the operation is not settled. Banks involved in the operation are formally informed of the fact by the BNA, leaving to the creditor bank the obligation for the interest rates arising from the delay. To settle the transaction, banks must send a new double communication. In the case of payment of interest rates, the settlement of this operation is processed by the same system through the double command.

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10. Currency in use

10.1 List of legal tender notes and coins currently issued and in use in the economy

- Currency: Kwanza (Kz) - Notes: -Kz 2000 -Kz 1000 - Kz 500 - Kz 200 - Kz 100 - Kz 50 - Kz 10 - Kz 5

- Coins: -Kwanza (Kz) - Kz 5 - Kz 2 - Kz 1

- Cents: - Cê 50 - Cê 10

11. Other activities of the Central Bank

There are no other functions.

12. The position of the central bank in SADC

The BNA participates twice per annum in meetings with the other central banks that are members of the Committee of Central Bank Governors in SADC, has a special relationship with the South African Reserve Bank (SARB) College with regard to training the BNA’s human resources. Moreover, the BNA participates in projects concerning: - Harmonization of Organic Law - Statistical database - Committee of Payment Systems - Legal and operational structure of central banks - Information technology - Protection services

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13. Publications

13.1 Regularly published publications (since 1997)

- Annual report of the Central Bank - Annual Balance of Payments Bulletin - Economic Quarterly Bulletin - Statistical Monthly and Annual Bulletin

13.2 Occasional/special publications published since 1990

Available occasional published at the Central Bank website: www.bna.ao.

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