Rwanda Holds Rate for Third Meeting in a Row

The National Bank of Rwanda lifted its benchmark interest rate by 50 bps to 7.25% during its February 2026 meeting, pushing borrowing costs to the highest since April 2024. Policymakers said the move will help to limit second-round effects of recent price increases and support a timely return of the inflation to the target band over the medium term. The overall inflation rate rose for the second month to a seven-month high of 7.5% in January 2026, compared to December's 5.2%, with urban inflation accelerating to 8.9% from 8% in December. Headline (urban) inflation is expected to remain elevated in the near term, slightly above 8% in the first half of 2026, before easing thereafter, returning towards the target band by the end of 2026. Meanwhile, the Committee highlighted Rwanda’s strong economic performance, with average growth of 8.7% in the first three quarters of 2025, up from 7.2% in 2024. It added that momentum carried into Q4, with the economic activity index climbing 17.1%.

The National Bank of Rwanda kept its benchmark interest rate unchanged at 6.75% during its November 2025 meeting, the highest level since July 2024. Policymakers stated the current stance was appropriate to keep inflation within the bank's 2%-8% target range, with a medium-term target of 5%. The central bank noted that headline inflation rose to 7.2% in Q3 2025, up from 6.7% in the previous quarter, due to increases in the core measure and energy prices, despite easing pressure from fresh food. Inflation is projected to remain within the target range, averaging 6.9% in 2025 and 5.8% in 2026. Core inflation is expected to remain high until early 2026 but should gradually decline later in the year. Meanwhile, the domestic economy is projected to sustain robust growth in Q3 2025, after expanding 7.8% in Q2.

The National Bank of Rwanda left its benchmark interest rate unchanged at 6.5% during its May 2025 meeting, marking the third consecutive meeting with no changes. Policymakers said the current stance was adequate to keep inflation within the bank's target while continuing to support economic growth. Inflation is projected to stay around 6.5% for the rest of the year, before declining to 3.9% in 2026, despite ongoing risks to the outlook.