Manuel Tiago Dias spoke to the press after the meeting of the Monetary Policy Committee (CPM) of the National Bank of Angola, held in Luanda, Monday and Tuesday, and explained that the decision was due to the prospect that this inflationary situation will compromise the objective of achieving a single-digit inflation rate in the medium term.
The CPM also decided to increase the interest rate on the permanent liquidity provision facility to 18.5 percent, and the interest rate on the permanent liquidity absorption facility to 17.5 percent, said the governor of the National Bank of Angola (BNA).
"The inflation trajectory recommends maintaining the restrictive direction of monetary policy with a view to aligning it with the medium-term objective, a situation that will continue to be monitored by the National Bank of Angola and which may lead to the taking of additional measures if necessary", declared Manuel Tiago Dias.
Another decision at this meeting was to increase the coefficient of mandatory reserves in national currency by 18 percent and, in the meantime, eliminated the custody fee on the excess free reserves of banking financial institutions deposited with the BNA.
The BNA governor highlighted that the increase in rates comes after a period of observation of the inflationary trend, which has remained persistent, particularly in the last three months, with rates remaining above 2 percent per month.
"We went until the month of May with a tendency to reduce inflation and then, in the months of May and June, there was a very substantial reduction in foreign currency supplies and consequently a depreciation of our currency in the order of 37 percent", pointed out Manuel Tiago Dias.
To this, added the BNA governor, was added the increase in prices following the reduction in fuel subsidies, particularly gasoline, with the central bank expecting that all these factors would have an impact on inflation for approximately three months, which did not happen and the increase in prices in the Angolan economy persisted.
Manuel Tiago Dias said that the surplus balance of the goods account stood at 16.8 billion dollars in the first ten months of this year, registering a reduction of 12 billion dollars compared to the same period last year, reflecting the reduction in export revenues at 13.9 billion dollars.
"As a consequence, the supply of currency in the foreign exchange market stood at 8.4 billion dollars, a reduction of 28.7 percent compared to the amount traded in the same period last year," he said.
According to the governor of the central bank, at the end of last October the 'stock' of international reserves stood at 14.2 billion dollars, corresponding to a degree of coverage of more than seven months of imports of goods and services.
