National Bank of Rwanda held its benchmark interest rate steady as inflation remains within target and the franc shows its strongest performance in more than five years, signaling confidence that tightening earlier in the year is keeping price pressures in check.
Governor Soraya Munyana Hakuziyaremye said the Monetary Policy Committee left the Central Bank Rate unchanged at 6.75 percent for the next three months, citing easing global inflation, robust domestic growth, and a stabilizing currency. “Our primary mandate remains price stability, but also safeguarding a stable and inclusive financial system,” she said during the Monetary Policy Committee briefing today.
Headline inflation in Rwanda averaged 7.2 percent in the third quarter, slightly higher than in earlier months but still inside the bank’s 2–8 percent target range. October inflation moderated to 7.1 percent, and full-year 2025 inflation is now forecast to average 6.9 percent, lower than estimates issued in August. The central bank expects inflation to fall to 5.8 percent next year, moving closer to its 5 percent mid-range target.
Global price pressures have eased more sharply than anticipated as supply chains stabilize, trade tensions cool and private sector stockpiling smooths volatility. “Inflation at global level will continue to decrease for 2025,” the governor said, noting a projected decline to 4.2 percent worldwide and 3.7 percent in 2026. Fuel and food prices, typically major inflation drivers in Rwanda, are also expected to fall, though pump prices remain high due to transport costs.
The franc has strengthened relative to recent years, depreciating only 4 percent in the 12 months to September, compared with 6.5 percent in the same period last year and a peak of 13.7 percent in 2023. Hakuziyaremye said the improvement reflects stronger export earnings, narrower trade deficits, and domestic foreign-exchange market reforms that curbed speculation. Merchandise exports rose 15 percent in the third quarter, driven by coffee, tea and minerals, while non-traditional exports surged by more than 50 percent.
Economic activity remains robust, with Rwanda posting 7.8 percent GDP growth in the second quarter and indicators suggesting similar momentum in the third. Rising business confidence and strong performance in services, manufacturing and mining continue to support the outlook. External resilience has also held up, with foreign reserves covering 4.2 months of imports, above the country’s minimum threshold.
Money market rates have eased following policy adjustments in 2024, and lending rates have begun to edge down, improving credit conditions for households and businesses even as the bank monitors the lagged effects of its policy decisions. The MPC expects the full impact of its August tightening to become visible in the next quarterly review.
Hakuziyaremye said the bank’s steady policy stance reflects confidence that inflation will stay contained while the economy maintains its growth trajectory. “We believe that this level is appropriate to keep inflation within our target range while continuing to support economic activity and access to finance,” she said.
