Angola’s central bank maintained its benchmark interest rate at 19.5% for a third time on Tuesday, citing a potential slowdown in headline inflation.
- The Bank of Angola had raised its main rate by 50 basis points at its May monetary policy meeting, after hiking it by 100 basis points in March seeking to tame the skyrocketing inflation which had crossed 30%.
- Annual inflation stood at 29.2% in October, a slowdown from 29.9% in September.
- The apex bank attributed the slowdown in inflation to enhanced supply of consumer goods coupled with adequate monetary conditions and the relative stability of the exchange rate.
“However, its level remains high, requiring the maintenance of a prudent monetary policy in order not to jeopardize the gains achieved and the medium and long-term objectives,” the Angola Central Bank said in a recent monetary policy statement.
The Angola Central Bank revised upwards its inflation forecast for 2024 to 27% from 23% foreseen at the last meeting.
The oil producing country saw its inflation accelerate above 30% in 2024 owing to the impact of the weakness of Kwanza and the removal of fuel subsidies. The bank characterized 2024 with challenging macroeconomic conditions on the back of persistent increases in healthcare prices, transport and communication prices as well as removal of fuel subsidies.
Angola’s forex reserves stood at US$14.8 billion in October, enough to cover 7.84 months of imports. The Angolan Kwanza has depreciated 9.9% against the US dollar currently trading at 910.9.
The central bank’s next monetary policy decision will be in January 2025.
