Key Takeaways
- Angola increases interest rate benchmar to 20%
- Benchmark increase part of deflationary process
- South African judge grants judgement to liquidate ponzi scheme company MIT
Angola is an oil-rich nation that depends on crude oil exports to drive its economy. However, the country has struggled in the past decade with falling oil prices leading to significant economic strain.
The Central bank governor Kose de Lima Massano revealed to local reporters that the latest measure was required to control the disparity between inflation and interest rates. The current inflation rate is 26%, and economists have projected that it could hit 40% before the turn of the year.
The apex bank is trying to prevent 2016 when the country posted inflation rates of 40%. At the time, the bank had to increase the interest benchmark rates to 15.5% to stabilize the economy, and subsequently, the inflation rate dropped.
However, Angola has experienced a steady rise in inflation rates since 2019, with the Covid 19 pandemic a major factor in the increase. According to financial analyst Tiago Dionisio, the new benchmark will help protect the local currency (Kwanza) and maintain its current exchange rate levels.
The new benchmark is expected to pass through the legislature before the central bank can implement it. In South Africa, a judge has given a judgment granting liquidators access to Mirror Trading International (MIT) accounts.
MIT was a Ponzi scheme that scammed thousands of South Africans in 2020 and was the subject of a protracted lawsuit. Liquidators had sought an order from the court to dismiss the challenges of MIT shareholders led by Clynton Mark.
The shareholders had argued that the liquidation process was unfair to them and was not appropriately handled. They also believe that dissolving MIT was premature and noted technical points for the judge to consider.
The judgment by the court is a significant victory for liquidators. However, it remains to be seen if the company's liquidation would provide sufficient funds to repay claims against the company.
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