The oil boom has fueled a surge in Angola’s kwanza, making it the world’s best-performing currency against the US dollar. The currency of Africa’s second-largest petroleum producer has risen 20% this year, boosted by rising oil prices, multiple credit-rating improvements, and the probability that the central bank will continue to raise interest rates.
The Russian ruble has been the worst-performing currency this year, falling 37% as a result of sanctions imposed on Russia following its invasion of Ukraine.
Angola’s economy, which relies on oil for 90 percent of export revenue, is expected to grow 2.9 percent this year after emerging from a five-year recession in 2021. According to S&P Global Ratings credit analyst Zahabia Gupta, the central bank may raise interest rates this month to reign in growing consumer prices.
To combat inflation, Angola’s central bank raised its benchmark interest rate to a record 20 percent in July, up from 15.5 percent. The kwanza is also recovering after a severe dip in 2019 following the central bank’s decision to allow the currency to trade more freely versus the dollar.
S&P improved the country’s credit rating on February 4, while FitchRatings upgraded the country’s debt last month. Moody’s Investors Service lifted Angola’s credit rating for the first time in September, citing improved governance and debt measures.
The rating upgrades came after Angola concluded its $4.5 billion IMF program last year, which allowed the kwanza to trade freely against the dollar.
About Angola’s Kwanza
The kwanza is the official currency in Angola since 1977, when it replaced the escudo, which had been the currency before Angolan independence from Portugal in 1975. The official currency symbol is Kz. The “Banco Nacional de Angola” is the official issuing institution. The first banknotes series was introduced in 20, 50, 100, 500, and 1000 kwanzas. In 2010, a new banknotes series was introduced 200, 500, 1,000, 2,000, 5,000 and 10,000 kwanzas.
The 500 Namibian dollars note front design features António Agostinho Neto (1922 – 1979), who was an Angolan national leader, politician, poet, and the 1st President of Angola from 1975 to 1979. A stylized image of the sculpture called The Thinker, originally from the Tchokwe people is a reference and symbol of the Angolan culture.
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