The Central Bank of Angola announced on Friday that it would cut the policy interest rate from 19.5% to 18%, a sharp drop of 150 basis points in one go.

(File photo, AFP)

[Financial Channel/Comprehensive Report] The first country to cut interest rates this year appears!

The Central Bank of Angola announced on Friday that it would lower the policy interest rate from 19.5% to 18%, a sharp drop of 150 basis points in one go, the largest drop since July 2018.

According to Wall Street reports, thanks to rising oil prices, Angola’s currency appreciated 9% against the U.S. dollar last year, helping to curb Angola’s inflation. It is expected that inflation will slow down further. The central bank announced yesterday that it would cut interest rates by 6 yards.

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The governor of the Central Bank of Angola, Jose de Lima Massano, said the decision was based on the gradual slowdown in inflation observed throughout 2022 and that some price pressures have eased.

This also reflects the alignment of monetary conditions with our medium to long-term inflation objective.

Inflation in Angola, Africa's third-biggest oil producer, has been slowing since last February and will end 2022 at 13.9%, below the central bank's target of 16%.

The Central Bank of Angola predicts that inflation will fall to between 9% and 11% by the end of 2023, and Massano pointed out that there is still room for interest rate cuts if inflation in Angola continues to fall.

With interest rate cuts likely to help boost Angola's economy, the IMF forecasts growth of 3.4 percent in 2023 after emerging from a five-year recession in 2021.

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