Speaking to the financial information agency Bloomberg, the head of the National Bank of Angola said he expected that "interest rates will follow the same trend" of slowing down inflation, which has been recording successive declines, albeit maintaining a high rate, at around 20 percent.
The bank kept the benchmark interest rate at 20 percent for the sixth consecutive month at the July meeting, based on a 22 percent recovery of the kwanza against the dollar this year, which makes the Angolan currency the second best performing worldwide against the currency of the United States of America.
The central bank expects inflation to slow to less than 18 percent by the end of the year, reaching 21.4 percent in July.
Cutting the cost of indebtedness will make Angola, the second largest oil producer in sub-Saharan Africa, an exception in the context of monetary policy worldwide.
The United Kingdom, for example, is expected to see inflation above 18 percent for the first time in nearly half a century, and Portugal recorded more than 9 percent in July, while Indonesia unexpectedly raised interest rates for the first time since 2018.
In June, at a conference near Lisbon, Massano Lima had already admitted the desire to lower the interest rate, but stressed that there were still no conditions.
"We are going to continue with a restrictive monetary policy because, despite the record of a decline in inflation, it remains at high levels, the year-on-year rate is above 20 percent, and there is work that must continue, but we must proceed with prudence. ", the governor said in June, when asked by journalists about the possibility of lowering the reference rate.
"We have a great desire to make conditions more relaxed, but we have to follow this path realistically, our first mission is price stability", he stressed at the time.
A smooth political transition process will enable African policy and monetary decision makers like Massano to capitalize on the economic recovery, which has already seen Standard & Poor's raise Angola's rating for the first time in nearly a decade.
The new President will have to resolve the debt issue, because although Fitch Ratings predicts that public debt will fall from 123.8 percent of GDP in 2021 to 56.5 percent of GDP this year, the truth is that external debt repayments will cost Angola US$5.5 billion a year until 2025.
China alone is a creditor of almost 20 billion dollars, even with the debt restructuring carried out in recent years with Chinese financial institutions.
This is the second term of office for Lima Massano, a UK-educated banker who has raved about stabilizing the exchange rate, allowing the local currency to trade freely with other currencies, easing inflation and improving the reputation of the national financial sector. after a series of reforms made in agreement with the International Monetary Fund.
