(Updates with comment from central bank in second paragraph.)
Oct. 28 (Bloomberg) -- The central bank of Angola, sub- Saharan Africa’s second-biggest oil producer, set a new benchmark interest rate at 10.5 percent as it seeks to contain inflation and protect the country’s currency.
“Considering the performance of economic activity at the national level, financial indicators should be monitored with caution so that the money supply remains at appropriate levels,” the Luanda-based Banco Nacional de Angola said in an e-mailed statement today.
The Monetary Policy Committee was formed in August and plans to meet monthly to decide on interest rates. Today’s decision was reached by consensus, the statement said. The next meeting is set for Nov. 28.
Commercial banks previously used domestic-bond yields and other financial instruments to set lending rates. Angola is trying to improve financial management after securing a loan from the International Monetary Fund in 2009.
Inflation slowed to 11.9 percent in September from 13.7 percent in the previous month, the statistics office said on Oct. 10. Angola is targeting inflation of less than 12 percent by the end of the year.
The committee said it also examined the euro area debt crisis and the downward revision of growth in the world economy, which has contributed to instability in international financial markets.
Standard & Poor’s raised its credit rating for Angola by one level to BB- on July 12. The economy will probably expand about 8 percent next year after a recovery in oil prices and as spending increases, according to forecasts from the World Bank.
The kwanza has weakened 2.8 percent against the dollar this year. The central bank sells dollars in three foreign-currency auctions a week.
--With assistance from Colin McClelland in Toronto. Editors: Paul Badertscher, Carlos Torres
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