02095cas a2200253 a 4500 AALejournalIMF005781 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872453 1018-5941 BD-DhAAL BD-DhAAL Kyei, Alexander. Understanding Inflation Inertia in Angola / Alexander Kyei, Nir Klein. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (19 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In recent years, the decline in inflation in Angola has stalled and further steps may be needed to attain the authorities' medium term goal of meeting the Southern African Development Community (SADC) convergence criteria of a low single digit inflation rate. A Vector Error Correction (VEC) model, which analyzes the factors that affect the inflationary process in Angola, suggests that the inflation path has been largely affected by exchange rate movements. This implies that greater exchange rate flexibility that facilitates a gradual appreciation would be instrumental to moderate price growth through reducing the price of imports and limiting liquidity injection by the National Bank of Angola (BNA). Additionally, the analysis shows that excess liquidity, which is measured by positive deviations of M2 from its equilibrium level, adds to demand pressures, and contributes to inflation with a lag. This underlines the importance of closely monitoring the growth of monetary aggregates as well as improving liquidity management. Mode of access: Internet Klein, Nir. IMF Working Papers; Working Paper ; No. 2009/098 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/098/001.2009.issue-098-en.xml IMF e-Library