The National Bank of Rwanda (NBR) has maintained its Central Bank Rate (CBR) at 7% in spite of the pressure from the International Monetary Fund (IMF). The IMF wants tighter monetary policy to reduce inflationary urgencies on Rwanda’s economy.
Inflation in the nation has begun to decline as governor of the central bank and chairman of the committee that determines interest rates, John Rwangombwa, predicts.
Based on the governor’s statement, fresh food and energy inflation are predicted to reduce. Performance of the agriculture sector are surmised to improve by the outlook for the other half of the year.
Rwanda’s top billing inflation reduced to 17.8% in April from 21.7% in November last year which is the smallest level in seven months.
From 6.50% in November to 7%, the policy rate was increased by 50 starting points by the MPC, which is the fourth rate increase in as many months as ascertained by the Central Bank of Rwanda every three months.
The Central Bank of Rwanda shot up its standard interest rate in February to 7.0% from 6.5%.
According to the National Bank of Rwanda, inflation pressures, which increased in January at 20.7%, were expected to continue in the short term before reducing to about 8% by the end of the year.
In line with the statement of the bank, the previous year commodity costs were peaked as a result of the war in Ukraine. This brought about a leap in medial headline inflation from 0.8% in the previous year to 13.9% in 2022.