Saturday, October 29, 2011

Angola Central Bank Sets New Benchmark Rate at 10.50%

The Banco Nacional de Angola (BNA) set its new benchmark interest rate at 10.5%.  The BNA said: "Considering the performance of economic activity at the national level, financial indicators should be monitored with caution so that the money supply remains at appropriate levels".  Earlier in the month the Bank was reported as delaying the introduction of the average interbank lending rate (the Luibor) until November.  The Bank will next review the benchmark interest rate on the 28th of November.

The BNA announced the planned introduction of the new interest rate in late September.  Previous monetary policy moves from the BNA include a 500 basis point cut to the required reserve ratio (from 25% to 20%), and a 500 basis point cut to the rediscount rate (also from 25% down to 20%) earlier this year.  Angola reported annual inflation of 11.9% in September, compared to 13.7% in August, 14.1% in July.  According to IMF data Angola's economy grew 7.06% in 2010 and recorded annual average inflation of 15.04% and full year inflation of 13% last year. 

The World Bank is forecasting the Angolan economy to expand about 8% next year.  Angola reported exports of US$52 billion in 2010, driven by oil earnings as Angola is Africa's second largest oil producer.  Angola recently had its sovereign credit rating upgraded to BB- by Standard & Poor's.  Angola's currency, the Angolan Kwanza (AOA), last traded around 95 against the US dollar.


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