Angola's central bank will focus on inflation and then financial stability from the start of next year after lawmakers agreed to change its mandate, Governor Jose de Lima Massano said.
Parliament on Sept. 1 approved a law to boost the central bank's independence by changing the way the governor is appointed and the mandate of the bank.
At a meeting of the central bank's monetary policy committee on Thursday, the first since the law was agreed, its members analyzed which of its exiting instruments may have to change to accommodate the shift, Massano said.
The new law clarifies our mission, “which is to guarantee price stability in the economy. Therefore, our instruments will also have to be recalibrated,” he said. “The interest rate must really convey our intentions.”
Inflation in Africa's third-largest oil producer surged to a five-year high in August despite a 450 basis point rate hike a month earlier. The rate has risen most on a net basis on a list of 48 countries monitored by Bloomberg.
Previously policy makers focused on money supply rather than lending rates to try curb inflation. That's because a lot of the price pressures in Angola came from rising import costs following a depreciation of the kwanza, rather than demand.
The bank also targeted short-term price-growth. It will now set medium-term inflation goals and introduce a short-term target band, Massano said.
To ensure transparency at its MPC meetings, it will initially sit with specialists to convey the reasons for its decisions and it also plans to publish minutes of its deliberations, the governor said.
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