Bloomberg: Angola Raises Rates to a Record as IMF Loan Talks Called Off

kwanza

Angola’s central bank raised its benchmark interest rate to a record 16 percent, the third increase this year, as the International Monetary Fund said the southern African nation called off loan talks to help steady the oil-producing nation’s economy.

The Banco Nacional de Angola increased the key lending rate from 14 percent after a meeting of its Monetary Policy Committee in the capital, Luanda, on Thursday. The bank has increased the rate by five percentage points since January.

Angola’s government has been struggling to deal with a slump in crude oil prices since mid-2014 that cut government revenue and resulted in the kwanza weakening against the dollar. Africa’s biggest crude producer relies on oil for about 95 percent of its export income.

Ricardo Velloso, IMF mission chief to Angola
Ricardo Velloso, IMF mission chief to Angola

The IMF said after the rate decision that Angolan President Jose Eduardo dos Santos had informed the Washington-based lender his government wants to end talks about a loan to help the country cope with the slide in prices. The nation only wants discussions to continue about the country’s annual economic assessment, IMF spokesman Gerry Rice said at a briefing in Washington.

The IMF mission chief to Angola, Ricardo Velloso, completed a two-week visit to Angola earlier this month after the country’s Finance Ministry on April 6 said it was seeking support to “complement the already steadfast response to the decline in oil prices.”

Angolan monetary policy makers will next meet on July 29, the central bank said.

Source: Bloomberg