Ver Angola


Oxford Economics predicts new rate increase from the National Bank of Angola in July

The consultancy Oxford Economics anticipated, this Monday, that the National Bank of Angola (BNA) will raise the interest rate again by 0.5 percentage points at its July meeting, to contain the rise in inflation.

:  Angola Image Bank
Angola Image Bank  

"We expect the BNA to choose to increase the reserve ratio and interest rates by a further 50 basis points in July, to help deflationary pressure on the exchange rate", write analysts from the African department of this British consultancy.

In the comment sent to investors about the increase in inflation in Angola, and to which Lusa had access, Oxford Economics says that "inflation is expected to continue to rise to close to 32 percent at the end of the first half of the year, and then the stability of kwanza exchange rate should help moderate inflation to 23 percent in December".

In the comment, analysts also write that "the decision to tighten monetary policy is the result of persistent monthly increases in the consumer price index and money supply."

The BNA's response last week, when it increased the interest rate, "reflects the central bank's expectation that inflation is close to turning the page, and its concerns about the negative impacts on the evolution of consumer spending".

On Friday, the central bank revised inflation upwards for this year to 23.4 percent, mainly due to the rise in prices for diesel and urban public passenger transport, as well as "inflationary inertia".

"We predict that prices should continue to rise, hence this upward revision of inflation, but, naturally, for this not to happen, it is necessary that we continue with the efforts that have been made on the demand side in order to control liquidity in circulation in the economy, which is the responsibility of the BNA", said its governor, Manuel Tiago Dias, then.

The BNA decided on Friday to increase its policy rate, from 19 percent to 19.5 percent, and the interest rate on the Permanent Liquidity Provision Facility, from 19.5 percent to 20.5 percent, in an attempt to curb inflation, it decided to maintain the interest rate on the Permanent Liquidity Absorption Facility at 18.5 percent and increase the coefficient on mandatory reserves in national currency from 20 percent to 21 percent.

Inflation increased again in April, for the 12th consecutive month, registering a year-on-year variation of 28.02 percent, a maximum of almost seven years, according to the National Statistics Institute (INE).


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