Inflation rides on food prices

Rwanda’s consumer price index for urban areas rose 1.04 per cent in February on the back of higher food prices, pushing the annual inflation rate to 7.85 percent from 7.81 percent a month earlier, latest data from the National Institute of Statistics Of Rwanda (NISR) shows. The NISR said Thursday, the cost of vegetables leapt 11.58 per cent from January while the price of non-alcoholic drinks jumped 10.16 per cent. Overall, food and non-alcoholic drinks rose 3.59 per cent from a month earlier.These items amount to just over a third of the basket of goods used to measure inflation in urban areas.The inflation rate for Rwanda as a whole, where food and drink makes up almost two-thirds of the basket, hit 9.83 percent in February, up from 8.28 percent in January.The urban inflation rate, the measure watched closely by the east Africa country’s central bank, rose steadily during 2011 to hit a peak of 8.34 percent in December before falling off in January.Like other countries in the region, food and fuel price rises were behind the steady increase in the inflation rate, though better food production in Rwanda meant it has not seen the double-digit rates of Kenya, Uganda and Tanzania.The National Bank of Rwanda (BNR) vowed last month to maintain a “prudent” monetary policy stance to safeguard against stubborn inflationary pressures.It raised its key policy rate by 50 basis points twice in the final quarter of 2011 to bring it to 7 percent.

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Inflation rides on food prices