The National Bank of Rwanda’s (BNR) Monetary Policy Committee (MPC) has maintained its key interest rate at 6.5 per cent in a move the bank says will sustain efforts to curb consumer price increases on the market. This decision was announced on February 13, during the presentation of the quarterly MPC update, which reviews recent global and national economic developments as well as informs potential interventions. ALSO READ: Rwanda central bank maintains policy rate at 6.5% The central bank’s decision to keep its policy rate at 6.5 per cent – the rate at which it lends to commercial banks –is based on expectations that inflation will remain within its target range of 2 per cent to 8 per cent in 2025. The central bank has maintained its policy rate unchanged since August last year. ALSO READ: Can Rwanda's monetary policy shift stimulate growth? Central bank Governor, John Rwangombwa, said that the decision was made to sustain the achievements made in easing inflation on the market since the end of 2023 and throughout 2024. The easing of monetary policy saw interbank rate – the rate at which banks lend to each other – drop to 6.7 per cent in the fourth quarter of 2024 compared to 8.2 per cent in the same period of 2023. However, Rwangombwa noted that the changes have not yet translated to how banks lend to its customers. The lending rate stood at 15.8 per cent in the fourth quarter of 2024. The central bank adjusted inflation projections for 2025 from 5 per cent to 6.5 per cent and 4.1 percent in 2026. However, risks around geopolitical tensions and agriculture performance are upheld for the outlook. According to the bank’s Chief Economist, Thierry Kalisa, economic growth projection for 2024 upgraded from the 8.3 per cent estimated in November, and “it is expected to exceed that figure based on different market dynamics.” He further noted that the same growth is expected for 2025 and 2026.
