Angola’s Central Bank said it will keep cutting interest rates as long as inflation is kept low, forecasting that inflation will fall to 16% this year and 9-10% by the end of 2023.
The central bank governor, Jose De Lima Massano said while speaking to newsmen on the sidelines of the IMF-World Bank Annual Meetings in Washington.
He said, “Today we have interest rates in Angola above 20%. So those are too high. And if we have room to keep on reducing them, we’ll do it”.
Unlike most other central banks, Angola has started to lower interest rates, delivering a rate cut in September for the first time since 2019 by 50 basis points to 19.5%.
That came against a backdrop of easing domestic inflation since the start of the year, from 27.7% in January to below 20% in August, and a strengthening kwanza, which has gained 26% so far in 2022 against the dollar, one of the best-performing currencies in the world.
“Our currency has found its equilibrium and we are not anticipating major appreciation or depreciation.
“If we notice that it’s time for us to intervene, to reduce levels of volatility, we’ll do it. It does not mean that the currency will not appreciate or depreciate, we just don’t want to see big moves in either direction.” De Lima Massano said.
Foreign currency reserves are currently at seven months of import cover, De Lima Massano said, calling that the “right level,” while he said GDP growth would likely be 3% this year.
