Ver Angola

Banking and Insurance

Central bank should only lower interest rate in 2022, considers Fitch Solutions

Consultant Fitch Solutions considered this Monday that the National Bank of Angola (BNA) should maintain the interest rate this year, and should lower benchmark interest rates by 200 basis points by the end of next year.


"The National Bank of Angola maintained its benchmark interest rate at 20 percent at the September meeting of the monetary policy committee, which reflects a balance between inflation risks and economic growth prospects, so we anticipate that the BNA maintains the rate until the end of the year, and then cuts the interest rate by 200 basis points until the end of 2022", reads a comment to the meeting.

In the note, sent to clients and to which Lusa had access, these analysts from the consultancy Fitch Solutions, owned by the same owners of the financial rating agency Fitch Ratings, write that the BNA should continue to consider that the risks of inflation are balanced against the perspective of the evolution of the economy.

"We expect the central bank to cut the interest rate to 18 percent in 2022, when inflation eases, supported by a stronger kwanza, which will give some monetary policy stimulus to the economy, which has been in recession since 2016," analysts conclude.

Inflation in Angola rose from 26.1 percent in August to 26.5 percent in September.