Angola’s central bank has reduced its benchmark interest rate by 125 basis points, citing continued progress in lowering inflation despite persistent uncertainty in the global economy.
According to Reuters, the National Bank of Angola lowered its policy rate to 15.75% from 17.0%, marking its second rate cut this year after a 50-basis-point reduction in May.
The decision reflects growing confidence that inflationary pressures are easing in one of Africa’s leading oil-producing economies, allowing policymakers to gradually shift towards supporting economic growth.
Governor Manuel Tiago Dias said the central bank expects inflation to continue declining in the coming months, even as geopolitical tensions in the Middle East present ongoing risks to the global economy.
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According to Reuters, Angola’s annual inflation rate fell to 10.11% in June, down from 10.88% in May and significantly lower than the 19.73% recorded during the same period last year.
Speaking at a news conference, Governor Manuel Tiago Dias said the central bank believes the downward trend in inflation will continue despite uncertainties linked to the conflict in the Middle East.
Reuters reported that the National Bank of Angola has revised its year-end inflation forecast downward to 8.6%, improving on its previous estimate of 11.5%.
The central bank also raised its economic growth forecast for 2026 to 3.6%, up slightly from the earlier projection of 3.5%.
In another policy development, Reuters noted that Angola has added China’s yuan to the list of currencies local banks may use to meet foreign currency reserve requirements, reflecting the growing role of the Chinese currency in African financial markets.
What This Means For Africa
Angola’s latest monetary policy decision highlights the progress some African economies are making in bringing inflation under control while creating conditions that support stronger economic growth.
For Governor Manuel Tiago Dias, the rate cut signals increasing confidence that inflation is moving onto a more sustainable path, allowing monetary policy to become more supportive of economic activity.
According to Reuters, the improved inflation outlook has enabled the central bank to lower borrowing costs while maintaining vigilance over external risks, particularly those linked to developments in the Middle East.
As one of Africa’s major oil exporters, Angola could also benefit from elevated global energy prices, which may strengthen government revenues and support broader economic performance.
The inclusion of the Chinese yuan among eligible reserve currencies further reflects the evolving nature of Africa’s financial relationships as trade and investment ties with China continue to deepen.
Across the continent, central banks are carefully balancing inflation control with the need to stimulate investment, employment, and long-term economic growth.
Angola’s experience demonstrates how improving macroeconomic conditions can create room for monetary easing while reinforcing confidence in broader economic reforms.
As inflation continues to moderate, policymakers will remain focused on sustaining price stability, supporting growth, and strengthening resilience against external economic shocks.
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Image Credit: Qiraat Africa
