Rwanda’s central bank cut its key interest rate RWREPO=ECI by 50 basis points to 7.0 per cent on Wednesday, saying inflation was projected to remain within its target band at around 5 per cent this year and next.
The rate cut followed two monetary policy meetings at which the Central Bank Rate was left unchanged.
In February, Governor John Rwangombwa said the bank could reduce the rate at upcoming meetings if inflation dynamics remained positive.
Annual inflation RWCPIY=ECI peaked at 21.7 per cent in November 2022. It fell to 4.5 per cent in April, well within policymakers’ 2-8 per cent target range.
Rwangombwa told a news conference on Wednesday that risks to the inflation outlook included global geopolitical tensions that could affect international commodity prices and adverse weather conditions in Africa.
He said the economy continued to expand in the first quarter, helped by a strong performance by the agriculture, services and industry sectors.
This month Finance Minister Uzziel Ndagijimana reiterated the government’s economic growth forecasts of 6.6 per cent this year, 6.5 per cent in 2025, 6.8 per cent a year later, and 7.2 per cent in 2027. The economy expanded 8.2 per cent in 2023.
–CNBC Africa
