In line with efforts to boost regional trade and financial integration, the Angolan kwanza has joined the Southern African Development Community real-time gross settlement (SADC-RTGS) system as a settlement currency.
This development was announced on Monday by South African Reserve Bank (SARB) Governor Lesetja Kganyago and Governor of the Banco Nacional de Angola Manuel Tiago Dias.
“The kwanza’s inclusion supports regional payments modernisation efforts and aligns with the Group of Twenty’s (G20) cross-border payment goals of reducing costs, increasing speed and improving efficiency in cross-border transactions,” SARB said in a statement.
The Angolan kwanza is the second settlement currency to be introduced in the SADC-RTGS system, which has settled transactions exclusively in South African rand since its inception in 2013.
The system has processed R250.7 billion worth of transactions per month since its introduction.
It is operated by the South African Reserve Bank, as appointed by the SADC Committee of Central Banks Governors.
There are currently 15 countries participating in the SADC-RTGS system.
“By enabling direct settlement in kwanza, participants transacting in the currency can reduce foreign exchange conversion requirements, helping to lower transaction costs for participants and their customers.
“A more diverse set of settlement currencies in the system makes it easier for businesses and customers to transact across SADC countries in local currencies.
“Faster settlement can also help businesses manage cash flow more efficiently and access funds more quickly when trading across the region,” SARB said.
The Reserve Bank said the intention is to onboard additional regional currencies, such as the Botswana pula, in due course.
“By joining the SADC-RTGS system, a country can enable its currency to play a greater role in regional trade and finance, reduce reliance on foreign currencies and intermediaries, lower the cost of doing business across borders and strengthen its position within the evolving Southern African and African financial landscape,” SARB said.
The enablement of a multi-currency capability in the SADC-RTGS system is one of the strategic initiatives to strengthen regional financial integration, promote greater use of local and regional currencies in cross-border trade and reduce reliance on non-SADC currencies. -SAnews.gov.za
