Lubango – The Central Bank of Angola (BNA) reduced the mandatory reserve ratio for Commercial Banks in national currency from 22% to 19% in May and up to July is to reach to 17%.
The decision was made Tuesday in the 105th Ordinary Meeting of the Monetary Policy Committee (CPM) of the Central Bank of Angola (BNA) that took place in Lubango City, southern Huíla Province, in which it was analyzed the recent trends and the perspectives of the main economic indicators aiming to assess the macroeconomic framework and to seek for solutions that contribute to a continuous stability of prices.
According to the Governor of BNA, José Massano, who was speaking in the press release at the end of the works, despite the uncertainties and the risks associated to the external economic context and the potential impacts on the national economy which is still recovering, the current status of the monetary policy remains adequate to reach the inflation objective.
Nevertheless, according to the official, due to the need for strengthening the monetary policy instruments, the CPM decided to reduce the levels of financial immobilization by starting the gradual process to lower the mandatory reserve ratio in national currency in five percentage points and to intensify the open market operations.
However, according to José Massano, the CPM decided also to keep unchanged the mandatory reserve ratio in foreign currency at 22% as well as the basic interest rates in 20%, the permanent liquidity-providing facility by 25%, the liquidity absorption by 15%.
On the monetary side, the governor of the BNA emphasized that the monetary base, in national currency, remained stable in April, but contracted by 6.39%, previous month.
The monetary aggregate in national currency expanded by 4.97% in April and 16.23% after that.
The official revealed that the total stock of credit to the economy, in national currency, expanded by 1.59% in April, reaching 4.04 billion kwanzas, which led to an expansion of 10.93% per year.
Regarding the foreign exchange market, the governor of the Angolan Central Bank said that 1.08 billion US dollars were traded, an increase of 14.20%, compared to 944.10 million in March, being that the national currency continued to appreciate against the US dollar, both in real and nominal terms, reflecting the improvement regarding trade.
The official explained that in April, the exchange rate stood at USD/AOA 405.62 against USD/AOA 446.44 in the previous month, which represented a monthly appreciation of 10.06%.
The next ordinary meeting of the Monetary Policy Committee of the Central Bank of Angola will take place on 29 July 2022, in the norgthern province of Cabinda.
Source: Angola Press News Agency