Luanda — Angola’s central bank cut its main interest rate on Tuesday, after keeping it unchanged for seven meetings in a row, saying inflation was slowing in line with its forecasts.
The Bank of Angola lowered its policy rate by 50 basis points to 19%.
Inflation in the Southern African oil-producing country continued its gradual decline in August, reaching 18.88% in annual terms, from 19.48% in July.
“Inflation continues to slow, leading us to believe that we are on track to achieve the inflation target set at the beginning of the year,” governor Manuel Tiago Dias told a press conference.
The central bank hopes to get inflation to around 17.5% by the end of the year, before later reducing it to single digits.
“The slowdown in inflation continues to be driven by lower food inflation, particularly in the province of Luanda, with notable reductions in the prices of rice, pasta, powdered milk, cooking oil, beans and other basic products,” Dias said.
The IMF this month cut Angola’s economic growth forecast for 2025 to 2.1%, from a previous estimate of 2.4%, citing lower oil exports and upside risks to the country’s ability to pay its debts.
Dias said the latest data suggested growth was close to 3% up to August, with declining activity in the oil industry offset by a strong performance by the non-oil sector.
As well as bringing down inflation, Angola’s government is trying to bolster public finances by cutting subsidies and opening up its state-dominated economy to more private investment.
Reuters
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