The Comite de Politica Monetaria (CPM) cut the taxa basica by 100 basis points to 17.5% at its January 13-14, 2026 meeting — the third consecutive reduction in a cycle that has now removed 200bps from the terminal rate of 19.5% reached in July 2024. With annual inflation at 15.7% and monthly CPI prints at decade lows, the BNA has concluded that the disinflationary trend is sufficiently entrenched to justify a faster pace of easing. The Economist Intelligence Unit projects an additional 150bps of cuts through the remainder of 2026.

Current Policy Instruments

The BNA operates a corridor system centred on the taxa basica, with standing facilities bracketing the benchmark rate:

The corridor width remains at 300bps (150bps on each side of the benchmark), consistent with the BNA’s approach since the 2019 monetary framework overhaul. The reserve requirement has been held at 22% for both local and foreign currency deposits since early 2024, reflecting the central bank’s desire to maintain liquidity absorption capacity while easing the price of money through the rate channel.

Rate Decision History

The BNA’s rate trajectory since 2020 tells a story of initial pandemic-era caution, aggressive tightening, and now calibrated easing:

Several features of this timeline merit attention. The January 2023 cut to 17.0% — a bold 250bps reduction — proved premature. Inflation re-accelerated through 2023 and into 2024, forcing the CPM into an embarrassing policy reversal with hikes in February and July 2024. This episode damaged the BNA’s forward guidance credibility and explains the cautious, data-dependent approach that has characterized the current easing cycle.

The September 2025 cut marked the beginning of the present easing phase. The CPM signaled that it would proceed gradually, beginning with a 100bps reduction. The November follow-up was a more modest 50bps, reinforcing the message of caution. The January 2026 meeting then surprised market participants by delivering a full 100bps cut — larger than the 50bps consensus — citing the January CPI print and improved inflation expectations survey data.

Transmission Mechanism

The BNA’s rate decisions transmit through the economy via four principal channels:

Interest rate channel. Commercial bank lending rates (taxa de juro activa) average approximately 20-25% for corporate borrowers and 25-35% for consumer credit. The spread between the BNA rate and commercial lending rates has widened to 500-800bps, reflecting elevated credit risk in the banking sector and limited interbank competition. Rate cuts at the policy level thus transmit with a lag and at a fraction of the full move. A 100bps BNA cut typically reduces average lending rates by 30-60bps over 3-6 months.

Exchange rate channel. The BNA’s rate decisions influence the attractiveness of kwanza-denominated assets relative to dollar alternatives. Higher rates attract portfolio flows and support the kwanza; lower rates create depreciation pressure. The managed float regime, operated through regular FX auctions, gives the BNA a second lever to manage the currency. In practice, the central bank has used reserve intervention to smooth kwanza volatility during the easing cycle, drawing on the $15.3 billion reserve buffer to prevent the rate cuts from triggering disorderly depreciation.

Expectations channel. The CPM’s post-meeting comunicados (statements) and quarterly relatorios de politica monetaria (monetary policy reports) shape market expectations about the future rate path. The BNA has improved its communications framework since 2020, publishing inflation forecasts and economic assessments that give market participants greater visibility into the reaction function. However, the premature 2023 easing and subsequent reversal remain a credibility scar.

Treasury yield channel. BNA rate changes directly influence the pricing of Bilhetes do Tesouro (Treasury Bills) and Obrigacoes do Tesouro (Treasury Bonds) on the primary and secondary markets. The 91-day BT yield has tracked the taxa basica closely, currently sitting around 17-18%. Longer-dated OTs incorporate a term premium that reflects inflation expectations and sovereign credit risk. Rate cuts compress the short end of the yield curve, potentially steepening the term structure if long-end investors demand additional compensation for inflation uncertainty.

Forward Rate Path: What the Market Expects

The EIU’s January 2026 assessment projects 150bps of additional cuts through the remainder of 2026, implying an end-2026 policy rate of approximately 16.0%. This trajectory assumes:

• Annual inflation continues declining toward the BNA’s 13.5% end-2026 target
• The kwanza remains broadly stable within the managed float band
• Oil prices sustain above $70/bbl, maintaining fiscal and external account stability
• No reversal of fuel or electricity subsidy reforms that could create an inflation shock

Under this baseline, the CPM would deliver 50bps at each of its three remaining 2026 meetings (likely April, July, and October), decelerating the pace of easing from the 100bps January move. An alternative scenario — in which inflation undershoots the BNA’s target, falling below 12% by mid-year — could prompt more aggressive easing, potentially bringing the rate to 15.0-15.5% by year-end.

The downside scenario — a kwanza depreciation event or oil price crash below $60/bbl — would halt the easing cycle immediately. The BNA demonstrated willingness to reverse course in 2024, and market participants assume the central bank would not hesitate to raise rates again if inflation re-accelerated above 20%.

Real Policy Rate Analysis

The real policy rate — the nominal taxa basica minus annual inflation — is a critical gauge of monetary stance:

The real rate has swung from deeply negative territory during the inflation peak (when the BNA was effectively behind the curve) to a modestly positive position today. The current +290bps real rate is restrictive by Angolan historical standards — real rates were consistently negative from 2015 through mid-2025 — but still below the levels seen in peer frontier markets with similar inflation profiles (e.g., Nigeria, Ghana, Zambia, where real rates of 3-6% are common).

The BNA’s objective is to maintain a positive real rate throughout the easing cycle. If the EIU’s end-2026 projections hold (16.0% rate, 13.5% inflation), the real rate would settle around +250bps — sufficient to maintain policy credibility while providing enough monetary stimulus to support GDP growth in the 2.5-3.0% range.

Institutional Framework

The BNA was established in 1976 and operates under Lei 16/10 (the Central Bank Law). The CPM comprises seven members: the Governor (currently Jose de Lima Massano), two Deputy Governors, and four directors. Members serve five-year terms and are appointed by presidential decree — a governance structure that limits de jure independence, though the Lourenco administration has broadly respected the CPM’s operational autonomy since 2018.

The BNA’s mandate encompasses price stability, financial system soundness, and foreign exchange management. Unlike the Federal Reserve or European Central Bank, the BNA does not have an explicit employment mandate, though its communications increasingly reference the employment implications of monetary policy decisions.

The central bank publishes the following key documents: quarterly Relatorio de Politica Monetaria, post-meeting comunicados, monthly Boletim Estatistico, and an annual Relatorio e Contas. These publications are available in Portuguese on the BNA website and provide the primary source data for this tracker.