Angola's central bank raised its key interest rates by 200 basis points, citing accelerating inflation from higher administered prices and the depreciation of the kwanza's exchange rate.
The National Bank of Angola (BNA) has now raised its rates by 300 basis points this year, following a 100 point hike in February, bringing total rate hikes since it embarked on a tightening cycle in October 2014 to 525 basis points.
The central bank's Basic Interest Rate (BNA) was raised to 14.0 percent from 12.0 percent, the rate on the standing liquidity transfer facility to 16 percent and the rate on its liquidity absorption facility to 2.25 percent from 1.75 percent.
Angola's inflation rate accelerated to 20.26 percent in February from 17.34 percent in January, with food and alcoholic drinks, housing electricity and fuels, and miscellaneous goods and services contributing most to inflation by rising 1.69 percent, 0.31 percent and 0.22 percentage points, respectively.
In addition to higher import prices from a falling currency, prices have also been boosted by government cuts to petrol subsidies at the start of the year.
Angola's kwanza has been hit hard by the fall in crude oil prices since the middle of 2014 and the central bank has devalued the kwanza several times. Angola is Africa's second largest crude oil producer and relies on revenue from oil exports for almost all its foreign exchange earnings.
The kwanza was trading at 159.8 to the dollar today, down 15.4 percent so far this year following a depreciation of 24 percent in 2015.
The fall in oil revenue has affected Angola's economy, with credit to the economy up by only 0.48 percent in February compared with 3.01 percent in January.
Last year the BNA often voiced its concern over the growth in credit, which was up by a cumulative 17.5 percent as recently as December 2015.
The BNA has forecast economic growth this year of 3.3 percent, down from 4.9 percent in 2015 and the lowest level since 2009, as the fall in oil prices cuts into exports and government revenue.
Earlier this month Angola's president appointed Valter Felipe da Silva as new governor of the central bank as part of a cabinet reshuffle. Da Silva replaced Jose Pedro de Morais who resigned after 14 months as governor.