Angola govt curbs central bank's powers

Angola's parliament approved a law that downgrades the status of the central bank, giving the government a major say in setting monetary policy.

Angola govt curbs central bank's powers

The law tightens President Jose Eduardo dos Santos' grip on power and flies in the face of calls from the International Monetary Fund for greater openness in what is already one of Africa's most secretive administrations.

The bill, approved by all 152 members of parliament present, will safeguard the central bank's "operational autonomy".

But it also states the central bank will in future "merely participate" in setting interest rates, overseeing the oil producer's foreign exchange reserves and organising the currency auctions that determine the value of the kwanza .

The bank will "stop setting the country's monetary, financial and foreign exchange policy and will instead participate in defining it" with the government, according to a copy of the text obtained by Reuters.

Officials from the IMF, which is running a $1.4 billion loan programme to Angola, were not immediately available for comment. The programme was launched in November and runs for just over two years.

CONSTITUTION

Deputy Central bank governor Ricardo Viegas told Reuters the central bank would "remain active in monetary policy decisions". Speaking on the sidelines of the parliamentary session, he denied the bill downgraded the bank's powers.

The bill also aims to bring the central bank's role into line with a constitution approved in January.

That new basic law was widely seen as consolidating Dos Santos' control over the southwest African nation by replacing the prime minister with a vice president.

Dos Santos, who has been in charge for more than three decades, is already responsible for running the government and armed forces and appointing judges to the supreme court.

One Luanda-based economist, who did not wish to be named, said the draft was another blow for the domestic and foreign institutions, including the International Monetary Fund (IMF), that have been calling for more accountability.

"This is not good for the country because any economy needs an independent central bank to define monetary policy and guarantee transparency," the economist said.
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Reuters

 

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Last Mod: 27 Mayıs 2010, 22:37
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