Angola Monetary Policy January 2025

Angola: Central Bank holds fire in January

Central Bank stands pat for third meeting in a row: On 20–21 January, the Monetary Policy Committee of the National Bank of Angola (BNA) decided to leave the key interest rate at 19.50%. The decision marked the fourth consecutive hold since July. Meanwhile, the Bank cut the reserves requirement rate by 100 basis points to 20.00%.

Sticky inflation and sturdy growth drive decision: The BNA opted to maintain a tight monetary policy stance in order to combat elevated price pressures: Inflation slowed to 27.5% in December, broadly in line with the Central Bank’s 27.0% end-2024 forecast but still far above most of its regional counterparts. The Bank noted a variety of factors driving inflation last year, among them the pairing-back of fuel subsidies, which should continue to fuel price growth this year. Meanwhile, the BNA highlighted that the economy accelerated in Q3 and should have expanded at a robust rate in Q4, buoyed by both the hydrocarbons and non-oil sectors; this likely gave the Bank scope to keep interest rates elevated.

Loosening cycle on the horizon despite upside risks: In its communiqué, the BNA did not provide specific forward guidance. Our panel anticipates inflation to slow in 2025 as a whole but to outpace the BNA’s end-2025 forecast of 17.5%. As such, risks to the policy rate are skewed to the upside. Still, most of our panelists expect the Bank to embark on a loosening cycle this year, delivering around 100 basis point cuts by end-2025.

The Bank will reconvene on 17–18 March.

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