Central Bank holds fire in March

Policymakers deliver fifth hold in a row: At its meeting on 17–18 March, the Monetary Policy Committee of the National Bank of Angola (BNA) decided to maintain the BNA Rate at 19.50%. This decision marked the fifth consecutive hold since July 2024. Meanwhile, the Bank cut the liquidity absorption facility rate by 100 basis points to 17.50%.

Central Bank maintains wait-and-see approach: The BNA opted to maintain a tight monetary policy stance in order to combat still-elevated inflation: Price pressures have trended downward since H2 2024, and the Bank sees them easing further going forward owing to high interest rates and improved consumer goods supply. Still, inflation remains far above the rate in most regional counterparts and should remain elevated as fuel subsidies continue to be scaled back later this year. Regarding economic activity, the Central Bank noted that GDP growth accelerated to 4.4% in 2024, buoyed by improvements in both the hydrocarbons and non-oil sectors; this likely gave the Bank scope to maintain its wait-and-see approach.

Interest rate cuts likely in 2025: The BNA’s communiqué was void of specific forward guidance. Most of our panel sees the Bank easing its stance in 2025, delivering around 100 basis points of cuts by December. That said, risks are tilted to higher-for-longer rates as our Consensus is for inflation to slow overall in 2025 but outpace the Central Bank’s 17.5% forecast for the end of 2025. The Bank will reconvene on 20–21 May.

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