National Bank of Rwanda Governor Soraya Hakuziyaremye and her team on Thursday presented the MPC
KIGALI – Rwanda’s central bank has raised its benchmark interest rate by 50 basis points to 8.75%, tightening monetary policy further as inflation accelerated to 14.5% in July, well above the bank’s target range.
The Monetary Policy Committee (MPC) announced the decision after its August 26 meeting, citing elevated inflation and increased risks to the economic outlook. The rate was raised from 8.25%, extending the monetary tightening cycle that began in late 2025.
The National Bank of Rwanda (BNR) said headline inflation rose from 9.1% in the first quarter of 2026 to 13.2% in the second quarter, before reaching 14.5% in July. Inflation is now projected to average 13.1% for 2026, slightly below the previous forecast of 13.9%.
The MPC said inflation remains significantly above Rwanda’s 2%-8% target range, driven by increases in core, fresh-food and energy prices. Core inflation reached 12.3% in the second quarter, while fresh-food inflation rose to 7.3%. Energy inflation surged to 45.7%, reflecting higher prices for solid and liquid fuels as well as cooking gas.
The central bank expects inflation to remain above its target throughout 2026 before gradually returning to the range in the second half of 2027. It forecasts inflation of 13.1% in 2026 and 7.9% in 2027.
BNR identified further risks, including the potential impact of the El Niño climate pattern on domestic and international food prices and continued tensions in the Middle East, which could keep global commodity prices elevated.
Despite the inflationary pressures, Rwanda’s economy has continued to expand strongly. Economic activity grew by 10% year-on-year in the first quarter of 2026, with broad-based growth across sectors.
The country’s merchandise exports also increased by 51% in the second quarter, supported by strong mineral exports and higher non-traditional and re-export earnings. However, imports rose by 28%, widening the trade deficit by 13.8% to $821.9 million from $722.3 million a year earlier.
The MPC said the latest rate increase is intended to anchor inflation expectations, limit second-round effects and support a return to the inflation target in the second half of 2027. The cumulative increase in the Central Bank Rate since November 2025 now stands at 175 basis points.
