National Bank of Rwanda Maintains CBR despite Inflation Risks
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The National Bank of Rwanda has retained the Central Bank Rate (CBR) at 6.5 percent following its Monetary Policy Committee (MPC) meeting. This marked the third consecutive meeting with no changes.
Governor Soraya Hakuziyaremye stated during a press conference that the current Central Bank Rate was sufficient to maintain inflation within the 2% to 8% target range and continue supporting economic growth.
“Our inflation is projected to stay around 6.5% for the rest of the year and is expected to decline to 3.9% in 2026. Nevertheless, risks to this outlook remain, and these include risking trade uncertainty and geopolitical tensions,” she said.
The CBR, which serves as a benchmark for short-term interest rates in the financial system, influences commercial bank lending and borrowing rates. It remains one of the bank’s key monetary policy instruments for controlling inflationary pressures.
Read: Bank of Uganda resists rate change as inflation risk looms
According to the National Bank of Rwanda, headline inflation rose to 6.7 percent in the first quarter of 2025, up from 5.2 percent in the previous quarter. The increase was driven mainly by higher core inflation and a surge in fresh food prices.
Core inflation climbed to 6.1 percent from 5.4 percent, largely due to rising prices in hotels and restaurants, while fresh food inflation surged to 11.2 percent, up from 5.6 percent.
Meanwhile, energy inflation slowed to 0.2 percent from 1.2 percent as falling prices for solid fuels helped offset higher liquid fuel costs.
Despite these pressures, the MPC expects inflation to average 6.5 percent this year before easing to 3.9 percent in 2026. However, it warned of risks stemming from global geopolitical tensions and shifting trade policies, which could push prices higher.
Money market conditions have eased in line with recent monetary policy adjustments. The interbank rate dropped to an average of 6.78 percent in Q1 2025 from 8.29 percent in the previous quarter, following earlier reductions in the CBR from 7.5 to 6.5 percent during 2024.
Deposit rates also declined to 9.45 percent, while the average lending rate fell to 15.89 percent, down from 16.35 percent.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.
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