Angola monetary policy january 2023

The Monetary Policy Committee of the National Bank of Angola (BNA) cut 150 basis points at its meeting on January 20, lowering the base rate to 18.00% from 19.50%. It also reduced the Standing Liquidity Facility rate from 21.00% to 18.00% and the Standing Liquidity Absorption Facility rate from 15.00% to 14.00%. The moves went against the global trend of tightening monetary policy.

In its statement, the bank stated that the decision was mainly driven by the decline in inflation during the year 2022, which came on the back of the strength of Kwanzaa on an annual basis and the increase in the supply of basic commodities. The cut marks the restart of an easing cycle that began in September and was paused in November due to the sharp drop in the value of Kwanzaa early in the fourth quarter. The currency’s stability in December and January gave way to the National Bank of Libya to resume cutting interest rates in an effort to boost domestic activity.

Looking to the future, the bank believes that inflation will slow further due to favorable supply and exchange rate dynamics, and expects inflation to range from 9% to 11% at the end of the year. In this case, Governor José de Lima Masano stated that interest rates could be cut again.

The next monetary policy meeting is scheduled for March 21.

FocusEconomics panelists see the policy rate ending 2023 at 16.56% and 2024 at 16.07%.

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