Angola’s central bank kept interest rates at 19.5% for a third time on Tuesday, citing a possible slowdown in overall inflation.
Angola’s central bank raised its key interest rate by 50 basis points at its May monetary policy meeting after raising it by 100 basis points in March to control inflation that has risen to 30%.
Annual inflation slowed to 29.2% in October, from 29.9% in September.
The central bank attributed the decline in inflation to consumer spending, liquidity and favourable exchange rates.
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“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 Bank of Angola raised its 2024 economic forecast to 27% from the 23% expected at its last meeting.
Inflation in oil-producing countries rose above 30% in 2024 due to the impact of the weak kwanza and the removal of fuel subsidies. The bank expects the macroeconomic situation in 2024 to be challenging due to health care spending, rising transport and communication costs, and the removal of fuel subsidies.
Angola’s foreign exchange in October was US$14.8 billion, enough to cover 7.84 months of imports. The Angolan kwanza lost 9.9% of its value against the US dollar and is currently trading at 910.9.
The next central bank decision is due in January 2025.
