Angola Monetary Policy March 2024

Angola: Central Bank resumes tightening cycle in March

At its 14–15 March meeting, the Monetary Policy Committee of the National Bank of Angola (BNA) resumed its monetary policy tightening cycle, raising the key interest rate by 100 basis points to 19.00%. The hike, which followed January’s hold, drove the key interest rate to its highest value in over one year. Meanwhile, the Bank raised the standing liquidity absorption facility rate to 18.50% and the standing liquidity facility rate to 19.50%, while keeping its required reserve ratio at 20.0%.

Price pressures intensified markedly in February, when inflation rose to a 22-month high of 24.1% on accelerating food prices amid weak national supply and falling imports. Moreover, the removal of petrol subsidies in June 2023 has contributed to an upturn in inflation since then. Against this backdrop, and the government’s commitment to phase out the remaining fuel subsidies, the Bank decided to tighten financial conditions further.

In its communiqué, the BNA did not include explicit forward guidance. Over half of our panel expects rate cuts before end-2024, while the rest see room for additional hikes.

The next monetary policy meeting is scheduled for 16–17 May 2024.

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