Angola’s central bank announced on Friday that it had decided to maintain its main lending rate, known as the BNA rate, at 19.5%, and the interest rates for providing liquidity at 20.5% and for absorbing liquidity at 18.5%.
The governor of the National Bank of Angola (BNA), Manuel Tiago Dias, said that these decisions were justified by the need to maintain adequate monetary conditions to slow the pace of price growth in the economy and to reduce inflationary pressures in the short term.
Speaking at a news conference on Friday, at the end of the 119th meeting of the BNA’s Monetary Policy Committee, the governor pointed to the slowdown in the monthly variation of the National Consumer Price Index (IPCN), which began last May, as one of the reasons for this decision.
He pointed out that the deceleration of the CPI began in May and the trend continued in August, “as a result of the relative improvement in the supply of essential consumer goods and the adequacy of the level of liquidity to economic activity.”
Inflation stood at 30.53% in August, beginning a downward trend that should continue in the coming months, taking into account the current conditions of liquidity and supply of essential consumer goods, he explained, citing data from the country’s National Statistics Institute (INE).
When asked about the inflation target for this year – set in May by the BNA at 23.4% – the governor reiterated the downward trajectory of inflation to justify maintaining his projections.
“We are also beginning to see a drop in year-on-year inflation: we left thirty-one percent inflation in July, now [in August] we are at thirty percent,” he noted. “We expect this trend to continue in the coming months, which is why we believe it is not appropriate to revise our inflation target for this year.”
Dias also reported that the monetary base in the national currency, the kwanza, expanded by 3.6% in August, bringing the accumulated expansion since the beginning of the year to 9.95%.
He said that the devaluation of the Angolan currency in the last two months was due to the high demand for foreign currency and that the regulator would continue to monitor the market.
The BNA, he said, believes that “it is premature, for the time being, to intervene in this way, but the conditions of monetary policy ultimately determine whether or not the BNA should intervene in the markets.”
The next meeting of the BNA’s monetary policy committee will take place on 18 and 19 November in the city of Ndalatando, Kwanza Norte province.
Lusa
