Fitch Solutions forecasts Angolan kwanza to fall from 451 to 470 this year and 499 per dollar in 2023

The consultancy Fitch Solutions forecasts that Angola’s national currency will counter the trend of appreciation against the dollar and fall from 451 to 470 kwanzas per dollar by the end of the year, depreciating a further 7.3% next year.

“We anticipate that the kwanza will depreciate marginally in the rest of the year to 470 kwanzas per dollar, after appreciating in 2021 and until the second quarter of 2022,” write the analysts of this consultancy owned by the same owners of the Fitch rating agency.

In the analysis note on the kwanza evolution sent to investors, Fitch Solutions said that “in the short term, the lower appetite of investors for currencies of emerging markets will lead to pressure for depreciation.”

So the forecast points to Angola’s national currency falling 7.3 percent in 2023, to an average of 499 kwanzas per dollar, “essentially due to the slowdown in international prices and domestic oil production.

Over the next three to six months, Fitch Solutions says the kwanza will counter the 18% appreciation from January to now and should end the year around 453.93 kwanzas per dollar, which means a 26.4% appreciation, comparing the 2021 average to the 2022 average exchange rate.

The forecast for next year points to a devaluation of 7.3%, to an average of 499 kwanzas per dollar, due essentially to the reduction in oil prices by 4.8% to an average of 100 dollars per barrel.

The fall in domestic production, which should register a decline of 3.5% next year, “due to chronic disinvestment in the oil sector and the depletion of some wells,” conclude the analysts.