- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 6.5%
The Monetary Policy Committee of the National Bank of Rwanda left the Central Bank Rate (CBR) unchanged at 6.5 percent for the next three months at its 14 May 2025 meeting, judging the current stance sufficient to keep inflation within the 2–8 percent target range as headline inflation edged up to 6.7 percent in Q1 from 5.2 percent on higher core and fresh-food prices but is forecast to average 6.5 percent in 2025 before easing to 3.9 percent in 2026 amid risks from geopolitical tensions and shifting trade policies. After lowering the CBR by a cumulative 100 bp in May and August 2024, the committee has held the rate steady at 6.5 percent in both its February and May 2025 meetings. The policy stance has pulled the interbank rate down to an average 6.78 percent in Q1, with deposit and lending rates also declining. Domestically, real GDP grew 8.9 percent in 2024 and the Composite Index of Economic Activity expanded 9.3 percent y/y in Q1 2025, reflecting resilient industry and services and a rebound in agriculture. Externally, a 5.8 percent rise in imports alongside a 3.0 percent drop in exports widened the trade deficit by 10.8 percent and contributed to a 2.46 percent depreciation of the Rwandan franc against the USD by end-April, though official reserves remained robust at 4.7 months of import cover. The MPC reiterated its readiness to adjust policy if needed to preserve price stability.
Rate evolution
From August to November 2025, the National Bank of Rwanda raised the Central Bank Rate by 25 basis points to 6.75 percent and then held it there. The August increase was framed as a pre-emptive step to keep inflation within the 2 to 8 percent target range after forecasts were revised up, even though headline inflation had stabilised at 6.7 percent in the second quarter, with the Bank citing seasonal weakness in agricultural output, administered price adjustments and fiscal measures, alongside adverse weather, international commodity and trade uncertainty, and supply chain pressures linked to geopolitical tensions. The decision also came against a backdrop of resilient domestic growth, strong services and industry activity, improved external trade dynamics and reduced foreign-exchange pressures.
In November, the Monetary Policy Committee kept the rate at 6.75 percent as headline inflation rose to 7.2 percent in the third quarter on higher core and energy inflation, but judged the stance adequate because inflation was projected to remain within target, while warning that weather shocks and geopolitical tensions could lift imported prices.
By August 26, 2026, the rate stood at 8.25 percent, and the Committee raised it by 50 basis points to 8.75 percent after inflation increased from 9.1 percent in the first quarter to 13.2 percent in the second quarter and 14.5 percent in July. Although inflation was projected to average 13.1 percent in 2026, slightly below the previous forecast of 13.9 percent, the Bank cited risks from El Niño and continued Middle East tensions and said the increase would anchor inflation expectations, limit second-round effects and support inflation’s return to the target range in the second half of 2027.