Angola: Bank of Angola holds fire in January
January 31, 2017
At its 30 January monetary policy meeting, the National Bank of Angola (Banco Nacional de Angola, BNA) decided to keep the Basic Interest Rate on hold again at the record high of 16.00%. The Central Bank raised the Basic Interest Rate three times in 2016 in a bid to combat inflation, which remains sky-high. Prices have been soaring due to successive fuel subsidy cuts, the weakness of the Angolan kwanza against the U.S. dollar and the lagged effect of loose monetary policy until the middle of last year, which has increased the cost of imports to the African country.
In its brief press release, the BNA stated that its decision to leave the rate unchanged was based on the latest evolution of prices, the exchange rate and other macroeconomic indicators, as well as on developments in the global economy. Despite the Central Bank highlighting that inflation had reached a multi-year high in December, it considered this to be due to seasonal factors linked to the end of the year. The Bank therefore determined that no further monetary tightening was currently necessary.
The next monetary policy meeting is scheduled for 27 February.
Author: Oliver Reynolds, Economist