Thursday, June 1, 2017

Angola holds rate as inflation continues to decelerate

    Angola's central bank left its benchmark BNA rate at 16.0 percent, with its monetary policy committee "noting that year-on-year inflation continued on its downward trajectory beginning in January 2017."
     The National Bank of Angola (BNA) has maintained its rate since June 2016 when it raised it to the current level to curb rising inflation. Last year the BNA raised its key rate 500 basis points.
     Angola's inflation rate, as measured by consumer prices in the province of Luanda, eased to 36.33 percent in April from 37.86 percent in March, according to the BNA.
     Nationally, inflation eased to 34.8 percent in April from 36.52 percent in March for the fourth  consecutive month of declining inflation since December 2016 when inflation hit 41.12 percent.
     Angola's inflation rate began accelerating in early 2015 as the fall in crude oil prices dented government revenue and foreign exchange earnings, weakening the kwanza's exchange rate and pushing up import prices and inflation.
      The BNA has devalued the kwanza several times in recent years and has been quoting the kwanza around 165 per U.S. dollar since mid-April 2016. In January last year the central bank let the kwanza ease to around 155 from around 135, the rate it had targeted since September 2015.
    Today the BNA said the average exchange rate of the kwanza in the primary foreign exchange market was unchanged at 165.91 per dollar and the central bank had sold the equivalent of US$815.27 million to commercial agents in April, down from $2.192.57 billion in March.
     Credit to the economy had risen 0.28 percent in April while government deposits in the banking system had decreased 5.99 percent, the BNA said in a statement issued today following a meeting of its monetary policy committee on May 30.
     The next meeting of the policy committee is June 30.



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