Angola Monetary Policy January 2023

Angola: Central Bank cuts rates in January

The Monetary Policy Committee of the National Bank of Angola (BNA) delivered a 150 basis point cut at its 20 January meeting, bringing the basic interest rate down to 18.00% from 19.50%. It also decreased the standing liquidity facility rate from 21.00% to 18.00% and the standing liquidity absorption facility rate from 15.00% to 14.00%. The moves ran counter to the global trend of monetary policy tightening.

In its communiqué, the Bank stated that the decision was chiefly driven by the decline in inflation during 2022, which came on the back of a stronger kwanza in year-on-year terms and an increase in the supply of essential goods. The cut marked the restart of the easing cycle that began in September and was paused in November due to a sharp depreciation of the kwanza in early Q4. The stabilization of the currency in December and January gave room for the BNA to resume cutting rates in a bid to boost domestic activity.

Looking forward, the Bank sees inflation decelerating further due to favorable supply and exchange rate dynamics and expects inflation to range from 9% to 11% at year-end. In this case, Governor Jose de Lima Massano stated that interest rates could be lowered again.

The next monetary policy meeting is scheduled for 21 March.

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