Monday, June 29, 2015

Angola raises rate 50 bps as inflation accelerates

    Angola's central bank raised its benchmark Basic Interest Rate (BNA) by 50 basis points to 9.75 percent, citing accelerating inflation but a slight deceleration in credit to the economy.
    The National Bank of Angola (BNA), which has raised its rate by a total of 75 basis points this year after also raising its rate in March, said inflation rose by 0.63 percentage points during May to an annual rate of 8.86 percent, the highest since October 2013.
    Preliminary data showed that credit grew by a cumulative 1.83 percent from January through May, below the 1.95 percent rise through April.
    The BNA added that the average reference rate of the kwanza depreciated by 0.91 percent from April to May, quoted at 11.84 to the U.S. dollar.
    Angola is Africa's second largest crude oil exporter and its export earnings have been hit by last year's decline in oil prices.
    It's currency, the kwanza, has been depreciating since July 2014 and on June 5 the central bank said it had devalued the kwanza by about 6 percent. On June 22 the BNA's governor was quoted as saying the central bank would implement measures to ease the shortage of U.S. dollars.
    Today the kwanza was trading at 109.97 to the dollar, down 6.5 percent since the start of the year but unchanged since June 5.
    In addition to raising the BNA rate, the central bank also raised the standing lending liquidity facility rate to 10.50 percent from 10.0 percent while the absorption rate was maintained at zero percent.


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