The Monetary Policy Committee (CPM) met on 18 and 19 May 2023 in Cuito city, Bié province, and decided to keep unchanged:
- The basic interest rate (BNA Rate) at 17%;
- The interest rate on the marginal lending facility at 17%;
- The interest rate of the Permanent Liquidity Absorption Facility at 13.5%.
The decision to maintain interest rates is based on the change in some of the macroeconomic variables with the potential to influence price stability in the economy, recommending a period of observation and accommodation of the decisions taken in the two previous Monetary Policy Committee sessions.
During the period, among the main changes, the reduction in the trade balance should be highlighted, with an impact on the supply of foreign exchange resources to economic operators and consequent pressure on the national currency, which should culminate in a lower supply of imported goods that are not yet fully compensated by domestic production.
Additionally, considering that the changes in question may prevail in the short term, the Monetary Policy Committee believes that it is necessary to offer financial instruments to mitigate the exchange rate risk. Thus, it decided to place National Treasury Bonds from the portfolio of the National Bank of Angola, in foreign currency, in the amount of 350 million US dollars, which may be acquired in national currency by any interested party at the Debt and Securities Exchange of Angola (BODIVA) or through the commercial banks.
In the international context, the forecasts of the International Monetary Fund (IMF), published last April in its World Economic Outlook, maintain the direction of deceleration of the world economy, with a growth rate of 2.8% in 2023.
In the advanced economies, a growth rate of 1.3% is expected, an upward revision of 0.1 percentage points when compared to the projection published in January.
For emerging and developing markets, the IMF revised the growth rate downwards to 3.9%.
In sub-Saharan Africa, the economy is expected to slow to 3.6%, down from 3.9% in 2022.
At a national level, the National Consumer Price Index (IPCN) compiled by the National Statistics Institute, registered a monthly variation of 0.92%, while the year-on-year inflation rate was 10.59%.
The greatest variations occurred in the Health (1.91%), Clothing and Footwear (1.55%), Goods and Services (1.45%) and Hotels, Cafés and Restaurants (1.22%) classes.
It should be noted that of the set of seven hundred and thirty-two products that make up the CPI basket, only twenty-four products grouped into the categories of Meat and Meat Products, Fish and Shellfish, Vegetables and Tubers, Bread and Cereals, and Hairdressing Salons, accounted for 50.23% of April inflation.
The border provinces of Namibe (1.12%), Cunene (1.08%), Zaire (1.08%), Uige (1.04%) and Lunda Norte (1.03%), recorded the highest inflation rates for the period.
In the monetary field, the Monetary Base in national currency registered an accumulated contraction of 5.05% during the year, while the intermediate variable (M2 in national currency) expanded by 3.56%.
In the external sector, as previously mentioned, there was a deterioration in the terms of trade, which contributed to the reduction of the surplus balance of the goods account by 27.05% to USD 6.04 billion in the first four months of the year, compared to the last quarter of 2022, reflecting the 23.02% reduction in the value of exports.
International Reserves remained stable. At the end of April they stood at 14.45 billion US dollars, which translates into a degree of coverage of 6.56 months of imports of goods and services.
The next meeting will be held in Luanda on 17 and 18 July 2023.