Angola's Kwanza Hits 25-Year Low: Central Bank Rules Out Intervention
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Loading... - Akuba Andoh
- 20 Sep 2024
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The Angolan kwanza has reached a new 25-year low against the US dollar, with the currency weakening to 947.3 on Thursday. This extends the kwanza's losses this month to 1.6% against the dollar, and 11.3% since the start of the year.
Despite the kwanza's decline, the Banco Nacional de Angola (BNA) has ruled out intervening in the market to stabilize the currency. Governor Manuel Tiago Dias stated that the central bank is "ready to carry out all the measures that are necessary," but believes it is "premature to intervene" at this time.
According to Dias, the recent depreciation of the kwanza is being driven by stronger demand for foreign currency from foreigners living in Angola. The BNA will continue to monitor the situation to see if this demand has dissipated with the sales made in the foreign exchange market.
The BNA has decided to leave borrowing costs unchanged at 19.5%. This decision aims to "reduce short-term inflationary pressures," with inflation having started a downward trajectory. The annual inflation rate in Angola eased for the first time in over a year to 30.5% in August, from 31.1% a month earlier.
The central bank has maintained its inflation target at 23% for the end of the year, citing expectations of easing inflation in the coming months. The BNA's monetary policy committee is scheduled to meet again on November 18 and 19.
