The Monetary Policy Committee (CPM) of the National Reserve Bank of Angola (BNA) decided last week to change the basic interest rate from 18% to 17%, a move that follows a reduction made in January this year.
The interest rate on the permanent liquidity facility went from 18% to 17%, while the interest rate on the liquidity absorption facility decreased from 14% to 13.5%.
Also read: Angola needs to allocate 10% of its budget to improve water and sanitation sector
The Committee also eased liquidity conditions in the financial system, adjusting the time period for compliance with reserve requirements by commercial banks from the current fixed daily basis to an average of fortnightly compliance.
The BNA Governor, José de Lima Massano, justified the decision as part of the strategy to continue to influence price stability in the economy and ensure a course of inflation in line with medium term objectives.
The coefficients in national and foreign currency remained unchanged at 17 percent and 22 percent, respectively.
As for Gross Domestic Product growth projections, the BNA kept unchanged at around 3.3 percent, as well as the inflation rate, which is expected to be between 9 and 11 percent, according to figures released in January by the CPM.
The most recent data for inflation in the country point to a continuation of the downward trajectory that has been observed since February 2022.
Also read: Angola’s Lifua Marginal Field begins production
According to the National Institute of Statistics, in February 2023, the inflation rate stood at 11.54%, the lowest level since September 2015.
But prices, in monthly terms, increased 0.86%, with the largest variations occurring in health (1.88%), clothing and footwear (1.86%), goods and services (1.41%) and hotels, cafes and restaurants (1.33%).
