Angola Maintains Key Rate and Adjusts Reserve Requirements for Growth

The National Bank of Angola has maintained its key interest rate at 19.5% for ten months. They also reduced the liquidity absorption rate and reserve requirements by 100 basis points each. These measures aim to boost liquidity, with GDP growth projected at 4.4% for 2024 and a decline in inflation to 17.5% by 2025.

In its March 2025 meeting, the National Bank of Angola maintained its key interest rate at 19.5%, marking a consistent period of ten months at this elevated level since December 2022. Concurrently, the central bank implemented a reduction in the liquidity absorption rate by 100 basis points, bringing it down to 17.5%. Furthermore, the reserve requirement ratio for commercial banks was also decreased by 100 basis points to 20%.

These strategic measures are designed to boost liquidity within the Angolan financial system, facilitating economic growth that is expected to surpass the 3% target. Projections indicate that the country’s GDP for 2024 will grow by 4.4%, significantly exceeding the 3.61% growth rate anticipated for the oil sector. Moreover, inflation rates are projected to decelerate to 17.5% in 2025, following an end-of-year estimate of 27.5% for 2024.

The National Bank of Angola has opted to retain its key interest rate at 19.5% while simultaneously reducing the liquidity absorption rate and reserve requirements for commercial banks. These actions aim to enhance liquidity and promote economic growth amidst decreasing inflation forecasts, thereby stabilizing the financial landscape in Angola.

Original Source: www.tradingview.com