Angola keeps benchmark rate at 19.5% after first cut in years

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By Sergio Goncalves

(Reuters) -Angola's central bank maintained its main interest rate at 19.5% on Friday after cutting it by 50 basis points in September, in contrast to a global trend of monetary policy tightening.

"The monetary policy committee will continue to guide its policies towards maintaining the current course of deceleration of inflation in line with the objective of achieving an annual variation of one digit," central bank governor Jose de Lima Massano told a news conference.

The southern African country's inflation rate eased further in October to 16.68% year-on-year, from 18.16% in September and 27.66% at the start of the year.

The steady decline in inflation, which Massano said had been achieved as a result of the monetary policy and stable supply of essential consumer goods, allowed the National Bank of Angola to cut its main rate on Sept. 26 from 20%, where it had remained since July 2021.

The next policy meeting will be on Jan. 20.

Massano said that Angola's macroeconomic fundamentals "remain encouraging", with the surplus of trade in goods in January-October rising 59% from a year ago, despite a drop in the third quarter from the previous three months due to a fall in global oil prices.

Angola's international reserves stood at $13.41 billion at the end of October, "covering about seven months of imports of goods and services", he added.

Deputy governor Rui Miguens said that all recent official data and estimates from the World Bank and the International Monetary Fund pointed to GDP growth of more than 3% this year. Last year, Angola's economy expanded 0.7%, cutting short five consecutive years of recession.

The central bank also left unchanged the rate of the permanent facility that provides liquidity to the interbank money market at 21%, as well as the rate of the facility that absorbs excess liquidity, at 15%.

(Reporting by Sergio Goncalves in Lisbon; editing by Andrei Khalip and Alex Richardson)


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