Angola’s central bank has cut its main interest rate to 18.0% from 19.5%, its governor José Massano said on Friday, stating the country recorded its lowest inflation rate in five years in December.
Massano said the National Bank of Angola (BNA) decided to cut the interest rate by 150 basis points after inflation last month came in below the central bank’s forecast.
The Southern African country’s inflation rate eased in December to 13.86% year on year from 15.24% in November.
The Bank of Angola last cut its benchmark interest rate on Sept. 26, when it lowered it to 19.5% from 20.0%, where it had been since July 2021.
The central bank now forecasts inflation to end the year between 9% to 11%, coupled with a 3.3% growth in gross domestic product for 2023.
“If the current situation remains unchanged, we are in a position to continue on this path,” said Massano.
An appreciation in the value of the kwanza against the dollar last year — largely because of higher oil prices — has helped keep a lid on Angolan consumer prices. The currency gained 9%, making it one of the world’s best performers.
Friday’s rate cut may help boost much-needed economic growth. The International Monetary Fund forecasts the economy will expand 3.4% in 2023 after exiting a five-year recession in 2021.
Angola’s MPC next meets on March 21.
Read also; Angola’s Central Bank Cuts Interest Rates to 19.5%, First Time Since 2019.
