Angola, Africa’s second-biggest oil producer, will benefit from a law requiring foreign companies to use local currency as it takes effect, Central Bank Governor Jose de Lima Massano said.
Angola passed a law last year that required foreign oil companies to start using kwanzas, the local currency, to pay taxes beginning in May. Since July 1 foreign companies must pay all domestic suppliers in kwanzas, and after Oct. 1, they have to pay foreign suppliers via Angolan bank accounts in either local or foreign currency.
“There will be an increase, a monetary flux, allowing more resources for the economy,” Massano told a banking forum on the law in Luanda, the capital, today. “The new law will harmonize the exchange rate system in Angola.”
Producers including Total SA (FP), Exxon Mobil Corp. (XOM:US) and BP Plc (BP/) contributed to Angola’s June crude oil output of 1.67 million barrels a day, second only to Nigeria in Africa.
“One of the main changes is that oil companies were subject to a special exchange system and now they must comply with the general exchange regime,” said Marilia Pocas, head of the Foreign Exchange Department at the central bank, in an interview.
The central bank rate to buy one dollar is 96.113 kwanzas, according to its website, though the common rate on the street, where most people change their money, is 100 kwanzas to the dollar.
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