By Philbert Girinema
KIGALI (Reuters) -Rwanda’s central bank on Thursday held its key interest rate at 7.5%, but its governor said it might cut the rate at one of its upcoming meetings if inflation dynamics continued to look positive.
Governor John Rwangombwa also said last year’s economic growth was expected to surpass an earlier projection of 6.2%.
It is the second time in a row that the National Bank of Rwanda had kept its key lending rate steady, after raising it from 7.00% in August.
Annual inflation peaked at 21.7% in November 2022. It fell to 5.0% in January, within policymakers’ 2%-8% target range.
“We might start reducing the policy rate in the next MPC (Monetary Policy Committee) rounds depending on how these economic variables behave,” Rwangombwa told a news conference.
“So far what we project is positive, and if it continues like this then we might start reducing the policy rate.”
In its latest forecast the bank said it expects inflation to average around 5% this year, but risks include geopolitical tensions that could affect global trade and weather events that could impact Rwanda’s agricultural output.
In December the finance ministry and central bank predicted the East African economy would grow 6.6% this year.
(Reporting by Philbert Girinema; Writing by George Obulutsa; Editing by Alexander Winning and Hugh Lawson)
