Angola: Bank of Angola maintains Basic Interest Rate unchanged at record high in August
August 29, 2016
At its 29 August monetary policy meeting, the National Bank of Angola (Banco Nacional de Angola, BNA) decided to keep the Basic Interest Rate on hold at a record high of 16.00%. The Central Bank has raised the Basic Interest Rate three times since the beginning of the year in an effort to combat spiraling inflation; the previous hike was at the monthly meeting in June. Inflation has been soaring due to the successive reductions in fuel subsidies and the weakness of the Angolan kwanza against the U.S. dollar, which is dramatically increasing 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 the global economy. The Central Bank stated that data from July showed that the monthly variation in consumer prices was caused by tightening supply of certain goods, a result of dwindling volumes of USD-denominated goods imports in the previous months. Although latest inflation data in August point to a slight improvement, the monthly variation in consumer prices continues to sputter at levels above 30.0%. This signals that measures to rein in inflation need to be further strengthened in order to guarantee the availability of foreign currency and goods and services.
Despite the dire consequences of unrestrained inflation, the Monetary Policy Committee decided to maintain the Basic Interest Rate unchanged at 16.00%. The next monetary policy meeting is scheduled for 28 September.