Angola's central bank lowered its benchmark BNA rate by 150 basis points to 16.50 percent and cut the ratio on mandatory reserves in kwanza by a further 100 points to 18 percent, citing a fall in inflation for the eight consecutive month and expectations that inflation would be lower than forecast.
Today's easing follows the National Bank of Angola's (BNA) decision in May to unify the rate on its marginal lending facility with that of its basic interest, the BNA rate, and a 200 basis point cut in the ratio on mandatory reserves.
Angola's inflation rate fell to 19.52 percent in June from 26.25 in October last year while the monetary base, the operational variable of monetary policy since last November, contracted by 7.75 percent in June and by 4.58 percent year-on-year.
The BNA has forecast inflation of 23 percent this year and now expects the rate to be lower.
BNA said gross international reserves in June had declined to US$17.50 billion in June from $18.98 billion in May and $18.06 billion in December 2017, equivalent to 7.3 months of imports.
As part of major overhaul of its policy operations following the arrival of Jose Massano as BNA governor in October last year, the central bank in January replaced its fixed exchange rate regime with a floating regime with bands and set the reference rate for the kwanza via auctions.
Since Jan. 9 the kwanza has depreciated steadily and was trading at 253.6 to the U.S. dollar today, down 34.5 percent since the currency began to float.
