Rwanda’s central bank has decided to maintain its key interest rate at 6.5% for the second consecutive monetary policy meeting. The bank indicated that, despite a recent increase in inflation, it anticipates that inflation will remain within its designated target range.
In January, the annual inflation rate climbed to 7.4%, nearing the upper limit of the National Bank of Rwanda’s target range of 2% to 8%.
Governor John Rwangombwa stated during a press conference that the recent inflationary pressures were primarily due to adverse weather conditions, which resulted in a delayed harvest compared to the previous year’s abundant yield.
Additionally, the bank has revised its average inflation forecast for 2025 to approximately 6.5%, an increase from the earlier estimate of 5.8%, and projects it to be 4.1% in the subsequent year.
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“Though there are slight pressures on inflation, (it) remains within the band, and we are confident that at this rate, 6.5%, we’ll be able to maintain inflation within the policy band,” Rwangombwa said.
“The risk we always highlight is these projections are based on normal weather conditions and normal agriculture performance. But also we see geopolitical tensions, globally, in the region, so this doesn’t take into consideration any effect from these tensions.”
The East African country’s economy was likely to have grown last year more than the 8.3% projected in November, the bank’s chief economist Thierry Kalisa told reporters.
