The Rwandan economy remains stable despite the turbulent global economic times, the central bank has said.
Following respective quarterly meetings by the Monetary Policy Committee and the Financial Stability Committee, the National Bank of Rwanda (BNR) Governor, John Rwangomwa, said they would maintain the current monetary policy stance.
He said the committees resolved to keep the key repo rate at 6.5 per cent, as a result. The key repo is the rate at which the central bank lends money to commercial banks.
It has been at 6.5 per cent for over two years now.
Rwangombwa said by maintaining the monetary policy stance, they hope to contain both inflationary and exchange rate related pressures, while continuing to support the financing of the economy.
He said in the first eight months of the year, new authorised loans to the private sector increased by 11.5 per cent to Rwf514.1 billion.
The governor said though inflation has remained above the medium projections and is currently at about 6.4 per cent, it is expected to slow down to 6 per cent by December, thanks to reducing prices of fresh products following the start of the rainy season.
The country’s trade deficit, however, continued to be a thorn in the flesh as it grew by 2.2 per cent in the first eight months on 2016. Rwangombwa said the widening trade deficit coupled with additional foreign exchange demand from some big projects under the public-private partnership framework had put the Franc under pressure.
This has seen the local unit depreciate by 8 per cent against the US dollar in August.