Monday, November 24, 2014

Angola holds rate but raises RRR by 250 bps

   Angola's central bank maintained its Basis Interest Rate (BNA) at 9.0 percent but continued to tighten its policy stance by raising the required reserve ratio for local currency deposits by 250 basis points to 15.0 percent.
    The National Bank of Angola (BNA), which has cut its rate by a net 25 basis points this year, noted that consumer price inflation rose by 0.29 percentage points to 7.48 percent in October, with prices of food and nonalcoholic beverages rising by 0.22 percentage points, the largest contributor.
    Credit to Angola's economy rose by an annual 19.14 percent in October to 3.359 billion kwanza and commercial banks purchased foreign exchange worth US$3.103 billion while the kwanza depreciated by an average 1.26 percent in October from the previous month to 99.68 to the dollar.

    The National Bank of Angola issued the following statement: (translation by Google)

"The Monetary Policy Committee of the National Bank of Angola (CPM) met on 24 November, at its thirty-eighth regular session, the eleventh of 2014.
In order to take monetary policy measures that contribute to the maintenance of price stability in the national economy, the evolution of inflation was analyzed, the real economy, fiscal and monetary accounts as well as the latest information on the international economic situation, including the SADC region. The analysis was based on data for the month of October 2014.


In October, the monthly inflation rate, measured by the Consumer Price Index of Luanda was 0.68%, up 0.27 percentage points from the same period of 2013. Inflation in the last twelve months stood themselves in 7.48%, up 0.29 percentage points compared to the previous month.
Class 01 - "Food and Non-Alcoholic Beverages", with 0.22 percentage points, was the largest contributor to inflation in the month;
Class 07 - "Transport", with 1.63%, was the most varied in Luanda, having also been the class with the most variation in the other provinces.
In the same period, among the other provinces, the subject of official collection of the general price level, by the National Institute of Statistics, Benguela province recorded the lowest inflation rate, ie 0.24% ;
The LUIBOR Overnight stood at 4.14% per annum and with maturities of 3 and 12 months in 7.49% and 9.54% per year, respectively;
Credit to the economy has reached a volume of Kz 3,358,000 million, representing an increase of 19.14% in the last 12 months.
During the reference period, commercial banks purchased foreign exchange in the amount of USD 3,103 million in the foreign exchange market, of which USD 1,388 million at the BNA and the rest to their customers.
In the primary foreign exchange market, the average exchange reference rate depreciated by 1.26% from the previous month, having stood at 99.68 kwanzas per US Dollar.


Based on the analysis of the evolution of the main macroeconomic indicators and their perspective of evolution, the Monetary Policy Committee (MPC) decided to keep:
The Basic Interest Rate - Rate BNA - 9% per year;
The Interest Rate Standing Facility Liquidity Lending at 9.75% per annum;
The Interest Rate Standing Facility Liquidity absorption at 1.75% per annum.

As a complementary measure, and to ensure price stability, the CPM decided to adjust, with effect from January 1, 2015, the ratio of required reserves in local currency, from the same 12.5% to 15%, and deductible the assets of credit disbursements granted to sectors of Agriculture and Fisheries.

The next regular meeting of the Monetary Policy Committee will take place on December 22, 2014."


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