(Bloomberg) -- Angola’s central bank kept borrowing costs unchanged for the third consecutive time after revising its outlook for inflation upwards.
The monetary policy committee kept the key rate at 19.5%, Governor Manuel Tiago Dias said at a press conference in Ndalatando, east of Luanda, the capital, on Tuesday.
“The downward trend of inflation continues, however its level remains high, requiring the maintenance of a prudent monetary policy in order not to compromise the gains achieved and medium-long term objectives,” he said.
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Annual inflation in the net importer eased to 29.2% in October from 29.9% the previous month, as the kwanza recovered from a 25-year low against the dollar after the central bank sold $250 million in foreign currency to commercial lenders.
The tepid slowdown led the MPC to raise its year-end inflation target to 27% from 23%, Dias said.
While the kwanza’s stability has helped cool inflation, the gradual elimination of fuel subsidies and adjustments in transportation prices continue to put upward pressure on prices, the governor said.
“Monetary policy has been carried out under a challenging marcoeconomic context,” Dias said, adding that there remained a “high level of uncertainty” globally.
His comments came hours after Ukrainian forces carried out their first strike on a border region in Russia using Western-supplied missiles and as President Vladimir Putin approved an updated nuclear doctrine expanding the conditions for using atomic weapons. The moves prompted a rush into safe-have assets.
Angola’s next rate-setting meeting will be Jan. 20-21.
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--With assistance from Simbarashe Gumbo.
(Updates with the central bank’s inflation target in fifth paragraph)
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