Currency expected to devalue more than 50% this year - Plataforma Media

Currency expected to devalue more than 50% this year

The Oxford Economics consultancy on Tuesday said that Angola’s currency could depreciate more than 50% from last year’s value, which caused inflation to rise to the highest level since December 2017.

“Mainly due to the fall in the price of oil this year and foreign exchange liberalisation, the kwanza has lost around 20% of its value since the beginning of the year but has recovered thanks to a rise in oil prices in recent weeks,” said the analysts, noting that even so the currency remains vulnerable to changes in global sentiment and is expected to depreciate more than 50% in 2020.

In the note sent to customers, and to which Lusa had access, the analysts pointed out that the devaluation of the kwanza will continue to put pressure on consumer prices, due to Angola’s strong dependence on imported products and warned that the implementation of Value Added Tax (VAT), as well as the increase in prices will continue to put pressure on inflation.

Last week, the Institute of Statistics announced that the Consumer Price Index in Angola rose to 22.93% in July, an increase of 5.69 percentage points over the same period in 2019.

In monthly terms, inflation registered a variation of 1.78% between June and July 2020.

Regarding the province of Luanda, the inflation rate registered in the period from June to July 2020 was 1.83%, around 0.13 percentage points lower than in the previous period.

The year-on-year variation stood at 22.17%, i.e. an increase of 4.58 percentage points over the previous period.

Este artigo está disponível em: Português

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