Angola's central bank left its Basic Interest Rate steady at 12.0 percent, saying it was paying "particular attention" to the factors behind the recent trend in prices, such as an adjustment in administered prices and changes in the exchange rate of the kwanza.
The National Bank of Angola (BNA), which raised its rate by a 100 basis points at the last meeting of its monetary policy committee, noted that consumer price inflation rate rose by 3.06 percentage points from December to an annual rate of 17.34 percent in January, the highest rate seen since December 2005.
The categories of food and non-alcoholic beverages, transport, and housing water, electricity and fuel contributed most to inflation, the bank said.
The BNA has raised its basic rate by 325 basis points since embarking on a tightening cycle in October 2014, including 200 points in 2015 and 100 points this year.
On Feb. 1, the central bank said it expected inflation to have risen in January due to government cuts to subsidies on petrol at the start of the year.
Credit to the economy, which the central bank has often voiced its concern about, grew by 3.01 percent in January, a sharp drop from the cumulative increase of 17.5 percent in December.
Angola's kwanza has been hit hard by the fall in global crude oil prices since mid-2014 and the BNA has devalued its exchange rate several times. Angola is Africa's second largest oil producer and relies on oil exports for almost all its foreign exchange earnings.
The kwanza was quoted at 158.8 to the U.S. dollar today, down 14.9 percent this year alone after losing 24 percent against the dollar in 2015. The BNA said the average exchange rate in January was 155.6 to the dollar for a monthly depreciation of 15 percent.
Earlier this month the central bank announced that the Financial Action Task Force (FATF) had removed Angola from its blacklist after the country revised its regulatory framework and set up a financial intelligence unit that collects data on suspicious or unusual financial activity.
The FATF, which sets standards to prevent money laundering, added Angola to its list in 2010.
The BNA has forecast economic growth this year of 3.3 percent, down from an estimated 4 percent in 2015 and the lowest level since 2009, as the fall in oil prices cuts into exports and government revenue.