Rwanda’s Central Bank Tightens Policy Further

The National Bank of Rwanda lifted its benchmark interest rate by 50 bps to 8.75% at its August 2026 meeting, the highest level since 2009 and marking the third consecutive hike. Policymakers said the move aimed to bring inflation back within the target range of 2% to 8%, while safeguarding price stability and supporting sustainable economic growth. Rwanda’s annual overall inflation rate has remained in double digits since April, with price pressures showing no signs of easing in July 2026. Inflation climbed to 13.8% from 12.7% in June, reaching its highest level since September 2023 and marking a fourth consecutive monthly increase. The upward trend was further reinforced by the impact of the Middle East conflict.

The National Bank of Rwanda raised its benchmark interest rate by 100 bps to 8.25% at its May 2026 meeting, the highest level since 2009, following a 50 bps hike in February. Policymakers cited persistent inflationary pressures, further exacerbated by the Middle East conflict. The move aimed to curb second-round effects from recent price increases and bring inflation back within the central bank’s 2%–8% target band, after price growth accelerated to double digits for the first time in nearly three years. Overall inflation in Rwanda rose to 11.5% in April 2026 from 7.7% in the previous month, reaching its highest level since October 2023. It is expected to remain elevated in the near term, before returning toward the target range by the end of the year.

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%.