Monday, January 29, 2018

Angola maintains rate as inflation decelerates

       Angola's central bank left its benchmark BNA rate at 18.0 percent, saying it was paying particular attention to inflation, which rose slightly in December but declined on an annual basis.
       The National Bank of Angola (BNA), which raised its rate by 200 basis points in November 2017 and then revamped its exchange rate regime on Jan. 4, added net international reserves declined by 6.64 percent in December to US$13.299.71 billion.
       Angola's monthly inflation rate was 1.2 percent in December compared with 1.04 percent in the previous month and 2.04 percent in December 2016.
        Year-on-year inflation in December eased to 23.67 percent from 24.7 percent.
        Since 2016 the BNA had fixed the kwanza to the U.S. dollar at 166 but on the black market it often changed hands at up to 400 per dollar.
        The fall in crude oil prices in mid-2014 hit the foreign exchange earnings of Africa's second largest oil producer hard, with the international reserves also declining.
        After taking over as BNA governor in late October, Jose Massano moved swiftly to abandon the BNA-administered exchange rate to an exchange rate band, with a reference rate determined by auctions of foreign exchange.
       On Jan. 23 the BNA held the fifth such auction, selling 81.8 million euros that were fully absorbed by 17 of 26 participating banks at weighted average selling rate of 253.706 kwanza based on a highest rate of 253.747 and the lowest rate of 253.126.
        The currency sold at that auction was mainly intended for the import of raw materials, parts, accessories and manufacturing while for food, medicine and private operations, the BNA will maintain a mechanism of direct sales through commercial banks.
        Against the U.S. dollar, the kwanza was quoted by banks at 203.6, down 18.5 percent from before the shift to a new exchange rate regime.



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