Angola Cuts Key Rate to 14.75% as Inflation Falls to Single Digits
By Aboki Forex —
Angola’s central bank cut its key lending rate by 100 basis points in Luanda on Tuesday, Sept. 15, taking the policy rate to 14.75% from 15.75%. It is the third reduction in a row after inflation fell to single digits for the first time in more than a decade.
The Bank of Angola had already cut by 125 basis points in July and 50 basis points in May. Inflation in the Southern African oil producer eased to 8.78% year-on-year in August from 9.33% in July. It was last in single digits in 2015.
Inflation forecast held, growth outlook raised
The central bank maintained its year-end inflation forecast at 8.6%. It sharply raised this year’s economic growth forecast to 6.15% from a projection of 3.6% in July. The bank cited a stronger performance in both oil and non-oil sectors.
Angola’s economy has benefited from high global energy prices linked to the Iran war. The International Monetary Fund has urged policymakers to channel oil revenue windfalls into debt reduction and building fiscal buffers.
Oil price assumption and imported risks
Finance Minister Vera Daves de Sousa said last week the government was likely to raise its 2027 oil price assumption from the $61 per barrel in this year’s budget. It would retain a conservative forecasting approach.
Liandra da Silva, a Nedbank economist, said Angola’s status as an oil exporter offered some protection from external shocks. But persistent increases in shipping costs and imported input prices could still drive some imported inflationary pressures.
Why the cut matters
Angola’s third straight cut shows how falling inflation and high oil revenue can give an oil-producing economy room to lower borrowing costs. The bank’s higher growth forecast also points to stronger activity in both oil and non-oil sectors. The IMF has urged policymakers to use oil revenue windfalls for debt reduction and fiscal buffers. The central bank’s next moves will depend on whether inflation stays near its 8.6% year-end target and whether imported cost pressures ease.