Angola: Central Bank stands pat in November
Central Bank holds for third meeting in a row: At its final meeting of 2024 on 18–19 November, the Monetary Policy Committee of the National Bank of Angola (BNA) decided to maintain the key interest rate at 19.50%. Moreover, the Bank left the standing liquidity facility rate at 20.50% and the standing absorption facility rate at 18.50%. The decision marked the third consecutive hold since July.
Slower-than-expected disinflation and strong GDP growth forecast motivate decision: The BNA was largely motivated by a softer-than-previously-expected downtrend in inflation. Price pressures had eased only slightly since the Bank last met in September, owing to the phasing out of fuel subsidies. As a result, the Bank raised its end-2024 inflation forecast from 23.0% to 27.0%. Regarding economic activity, the BNA forecasts that GDP will expand by about 4% at the end of 2024—the fastest rate in a decade—giving it scope to keep a tight monetary policy stance.
Interest rate cuts forecast for 2025: In its communiqué, the BNA did not provide specific forward guidance. Our panel expects the Bank to begin its loosening cycle next year and deliver 50 basis point cuts by end-2025. A weaker-than-expected currency is an upside risk.
The Bank will reconvene on 20–21 January.