A mission of the International Monetary Fund (IMF) led by Mr. Lamin Leigh that visited Luanda during March 2-12 for the first review of Angola's 27-month Stand-By Arrangement said in a statement.

It was stated that economic developments since the program was approved have been broadly in line with expectations. Market confidence has improved significantly thanks to prudent implementation of macroeconomic policies, and economic activity in key non-oil sectors has picked up. Inflation in the 12 months to December 2009 was 14 percent, indicating little immediate pass-through effects from the exchange rate depreciation.

The authorities' stabilization program, supported by the Stand-By Arrangement, has produced a steady improvement in macroeconomic conditions. The re-introduction of the foreign exchange auction system has allowed a significant and orderly adjustment in the official exchange rate and, together with a modest appreciation of the parallel market rate, has substantially narrowed the spread between the two markets. Fiscal performance has improved in the fourth quarter of 2009 on the back of tight expenditure restraint and higher non-oil revenues. This has also contributed to the stabilization of international reserves and to the improvement in market confidence.

The current round of discussions focused on shifts in monetary and exchange rate policies to further improve the workings of the exchange market system, development of a government debt management strategy to contain fiscal risks, and improvements in public finance management and fiscal transparency. Measures to achieve these objectives are being incorporated into the design of the authorities' program.