Central Bank surprises markets and cuts rates in September

Bank decreases rates to an over-one-year low: At its meeting on 15–16 September, the Monetary Policy Committee (CPM) of the National Bank of Angola (BNA) decided to reduce its BNA basic reference rate from 19.50% to 19.00%, surprising markets that had expected the Bank to stay put. September’s was the first cut since March 2023, bringing the policy rate to its lowest level since April 2024.

Waning inflation drives monetary easing: The decision to decrease interest rates was mainly due to the downward trajectory of headline inflation, which the Central Bank expects will fall to 17.5% by end-2025. Inflation came in at 18.9% in August, falling for the thirteenth consecutive month. In addition, the Governor of the BNA mentioned that current market conditions suggest that the kwanza, which has been largely stable against the USD, may strengthen against the USD, which would help reduce price pressures further. Finally, the rate cut should support domestic economic activity, which continued to show signs of weakness.

Panelists nearly split between a cut and a hold: The BNA did not provide explicit forward guidance. Our panel is divided, with about half of our panelists projecting an additional 50 basis point cut at the next and final 2025 meeting on 17–18 November, while the rest expect the Central Bank to stand pat. By the end of 2026, our Consensus is for the policy rate to have decreased by 100 basis points from current levels. A weaker-than-expected kwanza is an upside risk to rates, while lower-than-expected oil prices—which would hit public coffers, given income from oil represents 60% of fiscal revenues—are a downside risk.

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 5 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.

Want to get access to the full dataset of Angolan interest rate forecasts? Send an email to info@focus-economics.com.