South African and Angolan businesses trading across the region could benefit from faster and lower-cost cross-border payments after the Angolan kwanza became the second settlement currency to be introduced into the Southern African Development Community's real-time gross settlement (SADC-RTGS) system.
The South African Reserve Bank (SARB) and the Banco Nacional de Angola announced on Monday that the kwanza had been added to the regional payment platform as part of efforts to strengthen trade and financial integration within SADC.
The SADC-RTGS system has settled transactions exclusively in South African rand since its launch in 2013, according to the SARB. The introduction of the kwanza enables participants to settle eligible transactions directly in the Angolan currency, reducing foreign exchange conversion requirements and helping to lower transaction costs.
Broader use of local and regional currencies would make it easier for businesses to trade across SADC markets while improving payment efficiency and cash flow through faster settlement, the Reserve Bank said. It added that the multi-currency capability formed part of a wider strategy to promote regional financial integration and reduce reliance on non-SADC currencies.
The SADC-RTGS system processes about R250.7 billion in transactions each month and is operated by the SARB on behalf of the SADC Committee of Central Bank Governors. There are currently 15 countries participating in the system.
The Reserve Bank said additional regional currencies, including the Botswana pula, are expected to be added to the settlement system in future.
