National Bank of Angola continues tightening cycle in May

At its meeting on 16–17 May, the Monetary Policy Committee of the National Bank of Angola (BNA) increased the key interest rate by 50 basis points to 19.50%. The move marked the second consecutive hike—for the first time in almost a decade—but surprised markets on the downside. Meanwhile, the Bank raised the standing liquidity facility rate to 20.50% and the required reserve ratio to 21.00%, while maintaining the standing liquidity facility rate at 18.50%.

The Central Bank's decision was primarily driven by the persistence of inflationary pressures within the economy and aimed to control circulating liquidity. Inflation surged to 28.2% in April, the highest rate since June 2017, mainly driven by food and non-alcoholic beverages. Sustained weakness in the kwanza and last year’s petrol subsidy removal further fueled price pressures. The BNA also highlighted the impact of goods shortages, as an increase in national production has failed to compensate for reduced imports.

In its communiqué, the BNA did not include explicit forward guidance. That said, a majority of our panelists pencil in additional hikes this year; our Consensus is for the key interest rate to be raised by 50 basis points by end-2024. The next monetary policy meeting is scheduled for 18–19 July 2024.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Angolan interest rate projections for the next ten years from a panel of 9 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Angolan interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Angolan interest rate projections.

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