Rwanda’s Central Bank Maintains Key Interest Rate but Hints at Potential Cut in Future

The National Bank of Rwanda (BNR) has opted to keep its key interest rate stable at 7.5 per cent in its recent decision. However, Governor John Rwangombwa hinted at the possibility of a rate reduction in the upcoming Monetary Policy Committee (MPC) meetings if positive trends in inflation persist.

Governor Rwangombwa also noted that the economic growth for the previous year is expected to surpass the earlier projection of 6.2 per cent.

This decision marks the second consecutive instance where the BNR has refrained from altering its key lending rate, following an increase from 7.00 per cent in August.

In November 2022, annual inflation peaked at 21.7 per cent but declined to 5.0 per cent by January, falling within the policymakers’ target range of 2 per cent to 8 per cent.

During a news conference, Rwangombwa stated, “We might begin decreasing the policy rate in the upcoming MPC rounds depending on the behavior of these economic variables. So far what we project is positive, and if it continues like this then we might start reducing the policy rate.”

The bank’s most recent forecast anticipates inflation to average around 5 per cent this year, with potential risks including geopolitical tensions impacting global trade and weather events affecting Rwanda’s agricultural output. In December, both the finance ministry and the central bank predicted a growth rate of 6.6 per cent for the East African economy in the current year.



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