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Angolan Central Bank to Add Climate Risk to Banking Regulations

Angolan Central Bank to Add Climate Risk to Banking Regulations

The National Bank of Angola (BNA) will introduce Climate Risk into banking regulations in 2024, which should have an impact on banks granting credit to the economy, the deputy governor of the central bank said today.

Pedro Castro e Silva, who was one of the speakers at the 2nd edition of the Angola Economic Outlook 2023, organised by the Angolan government and Economia e Mercado magazine, said that Climate Risk complements banking regulations, which already include Credit, Liquidity, Exchange Rate and Interest Rate risks.

“Before banks grant credit for fisheries, for example, or for the development of an agricultural project, which is what we want for diversification, they will have to take into account factors related to sustainability and probably the impact this has on their capital base,” he emphasised.

Also for 2024, the BNA will maintain this year’s monetary policy, pointing out that the average inflation rate for next year’s economic year is 16 per cent, higher than the current rate.

“This means that we should still experience an upward trend in year-on-year inflation in the coming months, but over the course of 2024 we expect it to reduce, reaching a rate of 15 per cent at the end of the 2024 period,” he said.

The deputy governor of the BNA emphasised that in 2024, the central bank plans to maintain a sustainable level of net international reserves in the six months of imports, taking into account their importance in guaranteeing the payment of debt service, “when the national treasury is able to return to the debt markets”.

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Pedro Castro e Silva emphasised that the central bank will continue to apply and converge with the best practices of the European Central Bank and other bodies, such as the Financial Action Task Force (FATF), implementing a Resolution Fund that will start in 2024.

According to Pedro Castro e Silva, Angola has until June next year to implement the measures that the FATF has recommended, in order to make a decision on the country’s position.




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