Banco Nacional de Angola Holds Interest Rate at 10.25%

The Banco Nacional de Angola (BNA) held its new benchmark monetary policy interest rate unchanged at 10.25%.  The BNA said: "Bearing in mind the pooled analysis of macroeconomic indicators, including recent developments and prospects of the Angolan economy and international, as well as the macroeconomic targets set for 2012 (GDP growth of 12.8% and inflation at 10%), the Committee Monetary Policy BNA decided unanimously to maintain the Base Rate of Interest - rate BNA - at 10.25% and reduce the rate of Interest Standing Lending Facility Liquidity by 0.5 percentage points to 12%"

The BNA only introduced the interest rate in October at 10.50%, the bank first adjusted the rate last month when it cut by 25bps.  Previous monetary policy moves from the BNA include a 500 basis point cut to the required reserve ratio (from 25% to 20%), and a 500 basis point cut to the rediscount rate (also from 25% down to 20%) earlier this year.  Angola reported annual inflation of 11.9% in September, compared to 13.7% in August, 14.1% in July.  According to IMF data Angola's economy grew 7.06% in 2010 and recorded annual average inflation of 15.04% and full year inflation of 13% last year. 

The World Bank is forecasting the Angolan economy to expand about 8% in 2012 year.  Angola reported exports of US$52 billion in 2010, driven by oil earnings as Angola is Africa's second largest oil producer.  Angola recently had its sovereign credit rating upgraded to BB- by Standard & Poor's.  Angola's currency, the Angolan Kwanza (AOA), last traded around 95 against the US dollar.

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