- Decision
- Raise
- Rate change
- 50 bps
- Policy rate after decision
- 8.75%
The National Bank of Rwanda’s Monetary Policy Committee raised the Central Bank Rate by 50 basis points to 8.75% from 8.25%, continuing its tightening cycle as inflation remained elevated and outlook risks increased. Over the past year, the rate was raised by 25 basis points in August 2025 and stood at 6.75% in November 2025. Inflation reached 14.5% in July 2026 and is projected to average 13.1% in 2026, while the economy grew 10.0% year on year in the first quarter and activity remained strong in the second quarter. The merchandise trade deficit widened to USD 821.9 million despite strong export growth, as imports also increased. The central bank cited potential food-price pressure from El Niño and the risk that Middle East tensions could keep international commodity prices elevated. It expects the rate increase to anchor inflation expectations, limit second-round effects and support inflation’s return to the target range in the second half of 2027.
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.