East Africa

Rwanda makes biggest interest rate rise to 6pc

General Image

By BERNA NAMATA


Rwanda’s central bank has raised its lending rate by 100 basis points, the biggest increase in recent years, to 6.0 percent to stem rising inflation.

On Thursday, the National Bank of Rwanda (BNR) rate-setting Monetary Policy Committee (MPC) noted that inflation had hit 15.6 percent in July from 12.6 percent in the prior month, well above the 0.8 percent average rate recorded last year.

Read: Rwanda raises benchmark interest rate on inflation fears

The central bank attributes the sharp rise to imported fuel costs and the poor harvest due to unfavourable weather and increased prices of imported agricultural inputs. Inflation is a measure of annual changes in the cost of living.

Read: Fuel prices rise in Rwanda despite subsidy

“This (inflation) is a big concern for us. We are talking to other government agencies to intervene. Inflation is expected to remain high over the next three quarters and start easing in the second half of 2023 when the headline inflation converges towards the five percent benchmark,” BNR Governor John Rwangombwa told a press briefing on Thursday after the MPC meeting.

Advertisement

The uptick in inflation is expected to undermine the country’s economic growth prospects, projected to drop to six percent, down from 10.2 percent registered in 2021.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
WP Twitter Auto Publish Powered By : XYZScripts.com