After analysing the international and national economic and financial developments, the monetary policy committee of the National Bank of Rwanda has maintained the key repo rate – the rate used by the bank to control inflation – at 5 per cent.
The Governor of the Central Bank, John Rwangombwa told the press after the monetary policy committee meeting that Wednesday that the decision was based on the positive trends realised during the first half of 2019.
“With strong growth in the private sector that we want to continue supporting and with inflation still below the band of 2 per cent, the monetary policy committee decided to maintain the central bank rate at 5 per cent with expectation of continued trends,” he said.
The first half of 2019, credit to the private sector grew by 8.2 per cent from 1.8 per cent in the same period last year. Authorised loans, too, grew by 36.8 per cent from negative 3.3 per cent in the same period.
That, according to the committee, reflects the good economic performance, which is expected to be maintained throughout the year.
Headline inflation decelerated to 0.7 per cent in the first half of this year from 1.8 per cent in the same period last year, following a food deflation and a decline in energy inflation, the Bank said while core inflation dropped to 1.6 per cent from 1.8 per cent in the same period last year.
Rwangombwa who’s the chairperson of the committee said their decision to maintain the repo rate is expected to help the central bank continue to support the financing of the economy and improvement in aggregate demand.
He highlighted that there were expectations that there will be modest inflation rates and moderate exchange pressures.