In July 2024, surplus reserves in the Angolan banking system dropped by 12.34% to 614.73 billion kwanzas (approximately 606 million euros), primarily due to reliance on foreign currency and the contraction of the national currency, according to Banco Millennium Atlântico (BMA).
BMA economists view this reduction in surplus reserves—an indicator of available liquidity for banks—as a warning about the banking sector’s financial health and operational capacity. They highlight that around 82% of these reserves are held in foreign currency, despite a 10.12% decline from the previous period. The remaining 17.53% is in kwanza, which has decreased sharply by 21.44%.
This situation suggests dwindling local currency liquidity, potentially impacting banks’ ability to execute various monetization strategies. To optimize their surplus reserves, Angolan financial institutions have been buying foreign currency for trade, investing in Treasury Bonds, extending credit, investing abroad, and exchanging liquidity with other banks, according to BMA