Angola Cuts Key Interest Rate as Inflation Slows

The Bank of Angola slashed its key interest rate by 125 basis points on Tuesday as the country’s long-running inflation slowdown continues.

The central bank lowered its policy rate to 15.75 per cent from 17.0 per cent, expressing strong confidence that consumer prices will keep falling despite a highly volatile global economic backdrop.

Annual inflation in the Southern African oil-producing nation fell to 10.11 per cent in June, marking a steady decline from 10.88 per cent in May and nearly 20 per cent in June of last year.

Central Bank Governor Manuel Tiago Dias expects this downward trend to continue, prompting the bank to lower its year-end inflation forecast to 8.6 per cent and upgrade its economic growth outlook to 3.6 per cent.

To further stabilise the economy, the central bank also added the Chinese yuan to the list of approved currencies that local banks can use for their foreign-currency reserve requirements.

This decision highlights the growing influence of the yuan across African financial markets as Angola capitalises on high global oil prices.