Angola: Central Bank of Angola decreases rates in July
125 basis point cut: At its meeting on 14 July, the Central Bank of Angola decided to reduce the BNA Rate by 125 basis points from 17.00% to 15.75%, marking a second consecutive cut since March’s pause.
Disinflationary trend provides room for large cut: The Central Bank justified July’s sizeable cut by citing easing inflation and an improving economic outlook. Annual inflation slowed to 10.1% in June from 10.9% in May, and Governor Manuel Tiago Dias said price pressures should continue to ease despite uncertainty stemming from the Middle East conflict. Meanwhile, economic growth accelerated modestly in Q1.
Easing set to continue this year: There is no forward guidance provided by the Central Bank regarding future interest rate changes. Still, the improving inflation outlook and resilient non-oil economy suggest there may be room for further gradual easing, although lower oil prices, declining international reserves and strong monetary growth call for caution. Our panelists expect rates to end 2026 below current levels, reaching their lowest year-end level in 11 years.
Panelist insight: Emerging Market Watch analysts said:
“The latest decision marks an acceleration of the BNA’s easing cycle, with policymakers signalling growing confidence that inflation is converging toward single-digit levels. The improved inflation outlook and resilient non-oil economy provide scope for further gradual rate cuts. However, the sharp decline in oil prices since May, lower international reserves and still-strong growth in monetary aggregates suggest the central bank should remain cautious, particularly if weaker oil revenues begin to weigh on fiscal balances, foreign-exchange liquidity and kwanza stability.”