Angola MPC: Analysts say rate cut unlikely

Angola's Central Bank is set to announce its Monetary Policy Committee (MPC) decision later today, with analysts predicting that a rate cut is unlikely. Despite the country's economy grappling with numerous challenges stemming from the COVID-19 pandemic and a sharp decline in oil prices, the central bank has refrained from making any rate cuts this year. To shed light on this situation, Rui Oliveira, CEO of BFA Asset Management, shared insights during an interview with CNBC Africa. While discussing the economic landscape, Oliveira also touched on the impact of the ongoing COVID-19 situation in Portugal, where he is currently based. He highlighted the resurgence of cases in Portugal and the subsequent return to strict lockdown measures in certain regions, including Lisbon. Oliveira noted the challenges faced by businesses in these areas and emphasized the need for compliance with the newly imposed restrictions to curb the spread of the virus. Shifting focus to currency dynamics, Oliveira delved into the recent appreciation of Angola's currency, the Kwanza. He attributed this phenomenon to global factors driving risk currencies, such as the impressive performance of emerging market currencies like the South African Rand. While acknowledging the modest appreciation of the Kwanza in recent days, Oliveira cautioned that external factors, particularly oil prices, could influence the currency's stability moving forward. Against this backdrop, the impending MPC meeting in Angola has garnered attention, especially considering the absence of interest rate adjustments throughout the year. Oliveira highlighted that while rates have remained unchanged since October 2019, there are lingering expectations for a potential rate cut, especially in light of recent developments, including the government's request for additional funding from the IMF. The interview underscored the uncertainty surrounding Angola's economic policies and the nuanced considerations that policymakers must navigate amidst evolving global and domestic challenges.