Angola’s depleting foreign reserves prompted the central bank to ease currency controls, the regulator said on Thursday, a day after plans were unveiled to restructure foreign debt and allow looser trading of the kwanza.

The central bank had said on Wednesday it would shift from a currency peg to a trading band which would keep the kwanza’s value against the U.S. dollar within an as-yet undefined range.

The changes will be implemented from this month.

Angola, sub-Saharan Africa’s third largest economy, also plans to refinance its external debt which stands at $38 billion, Finance Minister Archer Mangueira, said on Wednesday.

The central bank said in a statement on Thursday its decision to ease currency controls came after it had analysed the “macroeconomic fundamentals of the Angolan economy, and particularly the decreasing trend of international reserves”.

Angola, Africa’s second biggest oil exporter, has maintained a quasi-pegged exchange rate of about 166 kwanza per dollar, even though the dollar buys about 400 kwanza on a thriving black market.

The central bank has been trying to defend the currency using foreign exchange reserves, but reserves have more than halved since 2013 to about $14 billion.

Oil accounts for around 90 per cent of Angola’s government revenue and years of depressed crude prices have hammered once booming economic growth and eroded foreign currency reserves.

(Reuters/NAN)