"In our opinion, the central bank will raise the reference interest rate later this year, from 17 percent to 20 percent, to control inflation and maintain a positive real interest rate", write the analysts in a comment to the most recent decision by the National Bank of Angola to keep the interest rate at 17 percent.
The decision to maintain the rate, taken on July 14, "increases the risk of higher-than-expected inflation in this second half", argue the analysts in the comment sent to investors and to which Lusa had access, in which they also take the opportunity to revise the inflation forecast in Angola, from 12.2 percent to 18.9 percent at the end of this year.
"The Angolan national currency has stabilized at around 825 kwanzas per dollar in recent weeks and foreign currency reserves have also improved, following a rise in global oil prices, a quick and short intervention by the central bank to fill a foreign currency deficit and the introduction of new rules on transactions in dollars by oil companies and banks", stresses the African department of consultancy Oxford Economics.
The stabilization of the kwanza follows a devaluation of the Angolan currency in the first half of the year, driven by the sharp decline in the final months of the first half of the year and the impact of the withdrawal of state fuel subsidies in June.
"The kwanza 'crash' during May and June, together with the reduction of subsidies, should put the Price Index under pressure in the coming months and, as a result, the BNA now expects annual inflation to be between 12 and 14 percent, above the previous forecast of between 9 and 11 percent", analysts conclude.
