APA – Kigali (Rwanda) – Rwanda’s central bank on Thursday increased the benchmark interest rate by 50 percentage points to 7.5 percent.
The move aims to anchor exchange expectations and fight against the current inflationary pressures, among other purposes, according to the Central Bank Governor, John Rwangombwa.
In face of high inflation, the central bank expects to push headline inflation to fall within the band (below 8 per cent) by the end of 2023 and around 5 per cent in 2024, even as he warned of unprecedented vulnerabilities such as climate shocks.
“The current forecast faces some uncertainty, such as the geopolitical tensions that could influence international commodity prices, as well as unpredictable events linked to climate change that continuously affect our agriculture sector performance,” he said.
The key repo rate represents the lowest rate at which the Central Bank charges commercial banks and the maximum rate at which it borrows from commercial banks.
It is reviewed and announced to the country’s banking system, and the public, by the Monetary Policy Committee of the Central Bank every quarter and when necessary.
CU/abj/APA