The National Bank of Rwanda (NBR) has maintained its Central Bank Rate (CBR) at 6.5 percent for the next three months, citing the need to keep inflation within the target range and support ongoing economic growth. The move, announced on Wednesday following a meeting of the Monetary Policy Committee (MPC), signals confidence in the country’s macroeconomic fundamentals amid global uncertainty.
Rwanda’s real GDP grew by an impressive 8.9 percent in 2024, driven by broad-based growth in services, industry, and agriculture. The central bank said high-frequency economic indicators for the first quarter of 2025 also showed robust momentum, with the Composite Index of Economic Activity (CIEA) rising by 9.3 percent year-on-year.
Despite the resilience of the domestic economy, the MPC noted ongoing global trade tensions, persistent inflationary risks, and uncertainty in monetary policy across advanced economies as factors justifying a cautious stance on interest rates.
“This decision is consistent with our inflation outlook and growth targets. Keeping the CBR at 6.5 percent provides a balanced approach to maintaining macroeconomic stability,” said Governor Soraya Hakuziyaremye, who also chairs the MPC.
Inflation slightly increased in the first quarter of 2025, with headline inflation rising to 6.7 percent from 5.2 percent in the previous quarter. However, the rate remained well within the NBR’s medium-term target range of 2 to 8 percent. The central bank projects average inflation of 6.5 percent in 2025 and a further decline to 3.9 percent in 2026.
The rise was largely attributed to higher fresh food prices, which surged by 11.2 percent, up from 5.6 percent in the previous quarter. This was due to unseasonably low yields in early 2025. Core inflation, which excludes volatile items like food and energy, also increased modestly to 6.1 percent from 5.4 percent.
Energy inflation, however, decelerated, providing some balance. The bank noted that reductions in fuel prices and firewood helped mitigate broader price pressures.
Rwanda’s interbank rate, which influences the cost of borrowing between banks, fell to an average of 6.78 percent in the first quarter of 2025, down from 8.29 percent in Q4 2024. The easing was attributed to the central bank’s earlier decision to lower the CBR from 7.5 percent in August 2024.
This downward trend was also reflected in commercial lending conditions. The average lending rate declined to 15.89 percent in Q1 2025, from 16.35 percent in Q4 2024. Similarly, the deposit rate dropped by 83 basis points to 9.45 percent.
“The easing in interest rates has helped stimulate credit to the private sector, which is vital for sustaining economic recovery and long-term development goals,” said the central bank in its statement.
While the economy’s fundamentals remain strong, Rwanda continues to face pressure on its trade balance. In Q1 2025, merchandise exports fell by 3.0 percent compared to the same period last year, primarily due to lower re-exports and weaker demand for traditional exports like tea and minerals.
Meanwhile, merchandise imports rose by 5.8 percent, largely driven by strong domestic demand for capital goods and industrial inputs. The trade deficit widened by 10.8 percent, putting additional pressure on the Rwandan franc.
The local currency depreciated by 2.46 percent against the US dollar as of April 2025, closely matching the 2.47 percent depreciation recorded at the end of 2024. Despite this, the central bank reaffirmed its commitment to maintaining adequate reserves. Rwanda’s foreign exchange reserves currently cover 4.7 months of imports.
Looking ahead, the NBR stated that it would continue monitoring both domestic and global economic developments. The MPC reaffirmed its readiness to take appropriate measures if inflation strays outside the target band or if external shocks require intervention.
With average inflation expected to moderate in 2026 and real GDP continuing its strong trajectory, the bank emphasized that the current monetary stance remains conducive to both growth and price stability.
“While global trade conditions and geopolitical tensions remain a concern, Rwanda’s strong domestic performance provides a buffer that allows us to pursue a steady policy path,” said Governor Hakuziyaremye.
The next MPC meeting is scheduled for August 2025.
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