The central bank of Rwanda maintains its key interest rate, citing that inflation remains within the targeted range

On Thursday, Rwanda’s central bank maintained its key interest rate at 6.5%, following reductions made in the last two rate-setting meetings this year.

Governor John Rwangombwa informed reporters that the decision stemmed from uncertainty regarding the agriculture sector’s performance, and the central bank believed it could maintain inflation within its target range of 3%-8%.

“At this moment, we believe the rate is adequate to keep inflation within our target range,” he stated during a news conference.

Annual inflation (RWCPIY=ECI), opens new tab has remained under 6% this year and stood at 3.8% in October.

Rwangombwa stated that the economy of the East African country had shown resilience in the third quarter, driven by the services and industry sectors, and projected that inflation would average approximately 4.6% in 2024.

The bank has raised its average inflation forecast for next year to 5.8%, from 5%, because of the impact of adverse weather conditions on farming.

“We expect to see some pressures on food prices, and therefore that has led us to increase (our) projection of inflation for 2025,” he said.

Thursday’s decision comes after a 50-basis-point reduction to the National Bank of Rwanda’s Central Bank Rate (RWREPO=ECI) in August, along with a comparable cut in May.