The National Bank of Angola decided to lower the market’s benchmark interest rate, the BNA rate, by 1.5 percentage points to 16.5%, the first change in the last seven months, according to a statement announcing the decision of the Monetary Policy Committee, which met on Tuesday in Luanda.
The Committee also decided to keep the interest rate of the Liquidity Absorption Facility unchanged and to reduce the ratio of Required Reserves for deposits of the private sector, central government and local governments in national currency to 17%.
These decisions were possible due to a drop in the annual rate of inflation for the eighth consecutive month, as well as forecasts that it is below the government’s macroeconomic scenario projection for the year (23%).
The Monetary Policy Committee of the National Bank of Angola added in the statement that the decline in the BNA Rate would have the effect of reducing interest rates on loans to the economy.
The BNA rate was unchanged since December 2017, after rising from 16% to 18% in November, a measure taken at that time to control price increases.
In May this year, the Committee decided to reduce the required reserve ratio from 21% to 17% in order to increase the liquidity of commercial banks and consequently credit to the economy. (macauhub)