Angola’s Central Bank recently increased its benchmark interest rate, to help shore up the Angolan Kwanza and arrest inflation.
The interest rate was hiked from 15.5% to a record 20%, following inflation that continued rising from March 2021 rate of 26%.
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Runaway inflation is a key reason behind crypto adoption in Angola as people seek to protect the value of their wealth.
According to Jose de Lima Massano, Head of the National Bank of Angola (NBA):
“Current data indicates additional inflationary pressures, which may put at risk the central bank’s inflation target of 19.5% for the end of the year.”
– Head, Central Bank of Angola
With developed markets looking to tighten monetary policy, emerging markets, including Russia and Brazil are also tightening to help prevent capital flight in case high-yield assets emerge in the developed markets.
The recent boom in the value of cryptocurrencies coincided with a period where the United States Federal Reserve had cut lending rates to 0%. Analysts predict that rising interest rates will lead investors to move their wealth to traditional assets.
Angola’s resource-reliant economy probably means that cryptocurrencies will remain an opportunity for regular Angolans looking to improve their livelihoods and protect themselves from inflation.
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RECOMMENDED READING: 3 African Countries Among 7 Worldwide Where Bitcoin is at an All-Time High
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