Angola Monetary Policy September 2022

Angola: Central Bank lowers rates in September

On 26 September, the Monetary Policy Committee of the National Bank of Angola (BNA) decreased the basic interest rate from 20.00% to 19.50%. Additionally, it reduced the standing liquidity lending facility rate from 23.00% to 21.00%. Meanwhile, the Bank left the standing liquidity absorption facility rate at 15.00%. The moves came in contrast with a global trend of monetary policy tightening.

The Bank’s decision was driven by the continued deceleration of inflation. According to the BNA, inflation eased due to prior monetary policy decisions, a higher supply of essential goods and the appreciation of the kwanza. In particular, the strengthening of the currency came on the back of soaring oil prices. The BNA stated that the economy was healthy and that it expects solid growth ahead.

The BNA did not provide explicit forward guidance. However, it expects inflation to slow down further and finish the year below 18%. Accordingly, the Bank is likely to ease some of its lending rates further, and our panelists have penciled in further rate cuts for this year and next.

Analysts at Fitch Solutions commented on the outlook:

“The BNA’s dovish stance will continue to be facilitated by favorable exchange rate dynamics and easing inflationary pressures.”

The next monetary policy meeting is scheduled for 25 November.

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