Angolan economist Wilson Chimoco today defended a ‘more energetic’ stance by the National Bank of Angola (BNA) to contain price rises in the country, where inflation has reached 31%, admitting that the current key rates should be maintained.
According to the expert, the slowdown in monthly inflation should lead the Monetary Policy Committee of the National Bank of Angola (BNA) to maintain its main rates, after the 118th ordinary meeting that runs until Friday in Cuando-Cubango.
‘The outlook points to maintaining the current interest rates practised by the BNA, because the slowdown in inflation that has been seen in the last two months, the reduction in the increase in the money supply available in the economy and the stability that has been seen in the exchange rate could justify this decision,’ the economist told Lusa.
Wilson Chimoco, who projected the BNA’s monetary policy for July, considered, however, that price levels remain high (31 per cent in June, stimulated by the rise in food and drink prices), which would require the BNA to take a ‘more energetic stance’ to contain this increase.
‘The last decisions taken in November 2023 and January, March and May 2024, to tighten monetary policy, have been having an effect and the effects [are] the slowdown in inflation in the last two months and it is to be expected,’ he emphasised.
The decisions of the BNA’s Monetary Policy Committee meeting, which began today in the southern Angolan province of Cuando-Cubango, will be announced on Friday at a press conference.
The Angolan central bank decided last May to increase its key rate from 19 percent to 19.5 percent and the interest rate on the Permanent Liquidity Facility from 19.5 percent to 20.5 percent, in order to curb inflation, while it also decided to maintain the interest rate on the Permanent Liquidity Absorption Facility at 18.5 percent and to increase the coefficient on compulsory reserves in national currency from 20 percent to 21 percent.
Chimoco, who believes that the BNA should maintain these rates, pointed out, on the other hand, that the organisation has been ‘very cautious’ in the area of its policies ‘and, when necessary, presents a more considered position for the tightening of monetary policy’.
“I don’t think it will be the other way round at this meeting. They are going to give an indication that they are concerned and attentive to the evolution of the inflation rate, but they are not going to take an additional measure to those already taken to contain price levels in the economy,’ he insisted.
In June, the Secretary of State for Planning, Luís Epalanga, emphasised the positive impact of the measures on the productive sector, and thus on the trajectory of inflation in recent months.
‘The [change from the previous month in] inflation in February was 2.58%, then it went up to 2.54%, we had a peak of 2.61% again, because of the transport price adjustment, and it stabilised last month [May] at around 2.41%, and our forecast for June is that it will be very close to two or much lower than that,’ he stressed.
According to Wilson Chimoco, if prices continue to vary below 3 per cent it is likely that by the end of 2024 the year-on-year inflation rate will be 23 per cent, the target set by the BNA for 2024.
“But it’s important to emphasise that this evolution depends a lot on the price of food and non-alcoholic beverages and health, which are the two main classes that have been increasing and have been putting pressure on inflation in Angola. This trend could moderate as the economy manages to produce more goods,’ concluded the economist.
Lusa
