KIGALI, Feb 19 – National Bank of Rwanda has raised its benchmark lending rate by 50 basis points to 7.25%, tightening monetary policy in response to inflation that has moved above the country’s target range.
Annual inflation accelerated to 8.9% in January, up from 8.0% in December, exceeding the central bank’s preferred band of 2% to 8%. The rate increase reflects policymakers’ efforts to bring price growth back under control while preserving the country’s strong economic momentum.
Governor Soraya Hakuziyaremye described the move as a calibrated intervention aimed at restoring price stability, noting that keeping inflation within the target range remains essential to sustaining long-term economic expansion.
The central bank said it will continue to closely monitor inflation trends and broader economic conditions, leaving room for further adjustments if inflationary pressures intensify beyond current projections.
Officials identified several risks to the inflation outlook, including weaker agricultural output, persistent energy-related cost pressures, and ongoing geopolitical uncertainties that could disrupt global and regional supply chains.
Despite the near-term inflation pressures, the outlook for Rwanda’s economy remains robust. Government projections indicate economic growth will remain above 7% annually through 2028, supported by continued investment, strong domestic demand, and structural reforms.
The policy adjustment highlights the central bank’s focus on balancing inflation control with the need to sustain one of Africa’s fastest-growing economies.
