Angola Monetary Policy September 2021

Angola: Central Bank stands pat in September

At its 30 September meeting, the Monetary Policy Committee of the National Bank of Angola decided to leave all its monetary policy instruments untouched. Consequently, the basic reference rate remained at 20.00%, the standing liquidity lending facility at 25.00%, the seven-day permanent liquidity absorption facility interest rate at 15.00%, and the coefficients of required reserves at 22.00%.

In deliberating its decision, the Bank noted robust credit growth in the economy, which should support activity ahead, and seemingly deemed higher inflation to be of a transitory nature. The Bank stated that Angola “continued to record inflationary pressures, following the trend that has been observed in the rest of the world”, with the monthly reading “mainly driven by the food and non-alcoholic beverages class”. Moreover, the Bank noted that consumer prices have increased at a relatively stable rate of around 2.0% every month, suggesting benign core price pressures. The Bank expects inflation to average 27.00% in 2021.

The Bank once again did not include clear forward guidance regarding future interest rate decisions. The majority of panelists participating in the FocusEconomics Consensus Forecast see the key policy rate ending 2021 at 20.00%. However, as inflation is forecast to moderate next year and beyond, panelists expect the Bank to embark on an easing cycle next year to support economic activity in the wake of a multi-year recession.

The next monetary policy meeting is scheduled for 30 November.

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