The central bank also decided to maintain the coefficient of mandatory reserves in national currency at 22 percent, eliminating the deduction of notes and coins, says a note posted on the BNA portal.
The note gives an account of an ordinary session held this Monday, which brought together the central bank's Monetary Policy Committee (CPM), during which “the main economic indicators, as well as the impacts of the policy measures taken previously, were analyzed about the different sectors of the economy ”.
In the document, the CPM notes that it also decided to keep the basic interest rate, BNA rate, at 15.5 percent, the interest rate on the marginal lending facility at 15.5 percent, the interest rate on the facility liquidity absorption ratio, with a maturity of seven days, at 7 per cent, the interest rate on the liquidity absorption facility, with 'overnight' maturity at 0 per cent and maintain the custody rate at 0.1 per cent on the excess liquidity of commercial banks.
Likewise, the BNA body decided to “keep the window of the permanent liquidity-providing facility active, with an 'overnight' maturity, up to 100 billion kwanzas, renewable on a quarterly basis, in a non-cumulative manner, throughout the financial year. 2020 ”.
In the document, the CPM considers that caution is necessary as to “optimism about the resumption of economic activity”, warning of the consequences of a “possible second wave of covid-19 in the main economies”.
Regarding the foreign exchange market, the central bank points out that in August commercial banks “bought more currency from their customers than from BNA”.
The regulator maintains that the increase in foreign exchange transactions between commercial banks and their clients "results from the strategy of gradual withdrawal of BNA as the main supplier of foreign currency resources in the interbank market, ensuring greater transparency in the operation of the foreign exchange market".
Due to developments in the country's credit rating, combined with the needs to mitigate the negative impacts of the covid-19 pandemic in Angola and to protect the financial system, the CPM “decided to implement the measure of deferral in the constitution of impairments for regulatory purposes in credit position of government bonds for a maximum of three years ”.
This approval must comply with specific regulations, which will be published in the form of a notice.
The statement released by the CPM adds that the stock of gross international reserves stood at US $ 14.64 billion in August this year, less than the US $ 15.39 billion in July.
“Despite the drop in international reserves, the country's external solvency remains assured, given that the current level corresponds to a coverage of around 11 months of imports of goods and services, above the six-month target defined as indicating the convergence of SADC [ Southern African Development Community], ”adds the statement.
Regarding net international reserves, these stood at US $ 9.58 billion at the end of August, after a reduction from US $ 10.26 billion at the end of July.
The CPM also points out that the level of liquidity in the economy must continue to be monitored carefully, in order to “not compromise the achievement of the objective of price stability in the economy”.
According to the most recent National Consumer Price Index, from the National Statistics Institute, Angolan inflation stood at 23.41 percent in the accumulated index between September 2019 and August 2020, the highest value since December 2017 (23.67 percent).
The CPM underlines "its commitment to the path of price stability, maintaining the forecast of 25 percent inflation for the current economic year".
The next regular CPM meeting is scheduled for 27 November.
