Angola Monetary Policy November 2023

Angola: Central Bank hikes in November

On 21 November, the Monetary Policy Committee of the National Bank of Angola (BNA) raised the key interest rate to 18.00% from 17.00%. Moreover, it increased the standing liquidity absorption facility rate to 17.50% from 13.50% and the standing liquidity facility rate to 18.50% from 17.50%.

In recent months, price pressures have intensified markedly—inflation rose for the fifth consecutive month in October to 16.6%. The uptrend was driven by the removal of fuel subsidies in June and a weaker kwanza in year-on-year terms. The currency’s depreciation was partly due to reduced Treasury and BNA interventions in the FX market in Q2. Consequently, the Bank upgraded its end-2023 inflation forecast to 19.0% from 14.0%. Against this backdrop, and in line with the goal of achieving single-digit inflation in the medium term, the Bank opted for a hike.

Meanwhile, the Governor stated that the Bank is currently not intervening in the FX market despite the kwanza’s stabilization around AOA 830 per USD since July. Instead, the Governor claimed that the currency has now largely adjusted to a reduction in foreign exchange supply.

The Bank’s forward guidance grew more hawkish, stating that the current trajectory of inflation supports maintaining a restrictive stance. Moreover, it added that it stands ready to take additional measures to bring inflation to its single-digit medium-term objective.

The next monetary policy meeting is scheduled for 18–19 January 2024.

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