The National Bank of Rwanda (NBR) has kept its central bank rate (CBR) unchanged at seven percent, despite International Monetary Fund (IMF) push to tighten the monetary policy further to contain inflationary pressures in the economy.
The central bank governor John Rwangombwa and chair of the rate-setting Monetary Policy Committee (MPC) on Thursday said that the country’s inflation has begun easing and is expected to fall further to NBR’s target of between two to eight percent before the end of the year.
“Analysis indicates the inflationary pressures are on a declining trend, although still high. Based on the projected ease, the MPC decided to maintain the CBR at 7 percent,” he said.
“Energy and fresh food inflation are projected to decline. The outlook assumes improved performance of the agriculture sector for the second half of the year,” the governor said noting that risks could arise from weather-related challenges.
Rwanda’s headline inflation eased to 17.8 percent in April, the lowest in seven months from a peak of 21.7 percent last November.
The MPC, which sets the CBR every three months, in February increased the policy rate by 50 basis points to seven percent from 6.50 percent in November, marking the fourth-rate hike in months.