"Our expectation is that the inflation rate could fall below 15 percent by the end of the year, so it is possible that we will see some more easing of monetary policy, possibly at the November 25 meeting, or in January 2023", write the BFA economists.
The central bank of Angola decided last Monday to reduce the benchmark interest rate, from 20 percent to 19.5 percent, citing the slowdown in inflation and the appreciation of the national currency, the kwanza.
"Considering the consistency of the slowdown in the evolution of prices in the national economy, particularly since the beginning of the current year, as a result of the continuous and rigorous control of liquidity, the appreciation of the kwanza in relation to the main currencies used in transactions with foreign countries and the increase in the supply of essential goods for widespread consumption, the National Bank of Angola [BNA] believes that conditions are met for the reduction of the key interest rate", announced the financial regulator, at the end of the monetary policy committee meeting.
At the meeting, the bankers decided to "reduce the Basic Interest Rate from 20 percent to 19.5 percent, reduce the Permanent Liquidity Lending Facility interest rate from 23 percent to 21 percent and keep the interest rate unchanged Permanent Liquidity Absorption Facility interest at 15 percent."
In addition to the economic environment in Angola, the decision also took into account "the external context and inherent risks, given the exposure of the Angolan economy to the oil sector and the weight of imported foodstuffs in the basket of supply to the domestic market", it is also read in the statement released last week, which maintains the forecast for inflation to fall to single digits in the medium term.
