Angola raises rate 25 bps as inflation, credit rises

    Angola's central bank raised its Basic Interest Rate (BNA) by 25 basis points to 9.0 percent but maintained its standing lending and absorption facility rates as inflation and credit increased.
    The National Bank of Angola (BNA) cut its rate by 50 basis points in July for a net reduction this this year of 25 points.
    In September Angola's inflation rate rose to 7.19 percent from 7.05 percent in August while credit to the economy rose by an annual 14.11 percent to 3.213 billion kwanza.
    Earlier this month the central bank said the country's economy should grow by an annual average of 5 percent over the next four years, boosted by the increasing participation of the private sector.
    The International Monetary Fund also said this month that Angola's growth was likely to slow to 3.9 percent this year from an estimated 6.8 percent in 2013 with improved agricultural production offsetting a drop in oil output.

    The BNA issued the following statement:


"I. EVOLUTION OF MONETARY AND FINANCIAL NATIONAL ECONOMY

• In September, the monthly inflation rate was 0.63%, up 0.13 percentage points from the same period in 2013. Inflation for the twelve months stood at 7.19%, higher than 0, 14 percentage points compared to the previous month.  

• Class 03 - "Clothing and Footwear", with 1.23%, which was more varied, while the Class 01 - "Food and Non-Alcoholic Beverages", with 0.24 percentage points was the largest contributor to inflation recorded in the month;

• The LUIBOR Overnight stood at 3.86% per annum and maturities of 3 and 12 months 7.32% and 9.52% per year, respectively;

• Credit to the economy reached a volume of 3.213 million Kz million, representing an increase of 14.11% over the last 12 months.

• In September, commercial banks gained currency in the amount of USD 2,990 million in the foreign exchange market, of which USD 1,155 million at BNA and the rest of their customers. 

• Foreign Exchange Market in the primary, the average exchange rate for reference depreciated by 0.73% against the previous month, having located in Kwanza 98.45 per US Dollar.
  

II. DECISIONS OF THE MONETARY POLICY COMMITTEE

Based on the analysis of the evolution of key macroeconomic indicators and their development perspective, the Monetary Policy Committee decided:  

• Increase the Basic Interest Rate - Rate BNA - 8.75% per annum to 9% per annum;
• Maintain Interest Rate of Standing Lending Facility Liquidity at 9.75% per annum;
• Maintain Interest Rate of Permanent Liquidity Absorption Facility at 1.75% per annum.

The next regular meeting of the Monetary Policy Committee will take place on November 24, 2014."

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