On Thursday, the Rwandan Central Bank said it would keep its benchmark lending rate at 7.5% (RWREPO=ECI), while predicting that inflation would move closer to the bank’s target range by the end of the year.
Even though it has come down from its all-time high of 21.7% in November of the previous year to 11.2% in the most recent month (RWCPIY=ECI), annual inflation is still much beyond the country’s goal range of 2%–8%.
During a news conference, the governor of the central bank, John Rwangombwa, stated that the monetary policy was “tight enough to bring inflation back to our band.”
According to what he said, “in 2024 (inflation) will be around 6%, but we also intend to maintain the rate for next year assuming nothing else; nothing unusual happens” to modify the trajectory of inflation. This is the assumption that he made.
Inflation expectations are subject to uncertainty due to geopolitical conflicts, which have the potential to drive up the price of global commodities and the performance of weather-dependent agricultural output.
According to the central bank’s estimations, the economic development rate slowed down somewhat in the third quarter, but the country is still on pace for growth of around 6.2% for the entire year 2023.