Oil crash victim: Angola asks IMF for bailout

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Source:   —  April 07, 2016, at 4:37 AM

Africa'south third largest economy is crumbling below low oil prices and has turned to the lender of latest resort: the International Monetary Fund.

Oil crash victim: Angola asks IMF for bailout

Africa'south third largest economy is crumbling below low oil prices and has turned to the lender of latest resort: the International Monetary Fund.

Angola has requested assistance from the IMF including an "economic program" that could be "supported by financial assistance," according to the IMF. In other words, the country is seeking a bailout.

Africa'south second largest oil producer has been running out of cash since the crash in oil prices that began in two thousand-fourteenth. Oil accounts for about seventy-five percent of government income and ninety-five percent of export revenues.

Angola'south currency, the kwanza, is down sixteen percent this year, making the country'south dollar-denominated debt more expensive to service.

In its international market debut latest year, Angola issued a $1.5 billion 10-year bond with a yield of 9.5%.

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Angola has also borrowed money from China, secured by oil. Those loans are squeezing state finances.

Balancing the budget has been a challenge, and the country is slashing spending by twenty percent in two thousand-sixteenth.

Angola, love many African oil producing nations, isn't diversified sufficient to weather the effects of the feeble oil price. The sub-Saharan nation also subsidizes fuel, something the IMF has already warned against.

In two thousand-thirteenth, Angola spent four percent of its budget on fuel subsidies.

The IMF-Angola talks will get space at the IMF spring meeting in WA following week.

Angola latest received assistance from the IMF in two thousand-ninth after the global financial crisis. That program was worth $1.4 billion.

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