A fall in fuel pump prices will certainly provide further relief to consumers with general commodity prices expected to follow a similar trend. Transport costs should be going down too.Government’s recent decision to slash fuel pump prices was the latest sign of a healthy economic outlook for Rwanda.Petrol pump prices fell by Rwf60 to Rwf970 while diesel prices were reduced by Rwf30 to Rwf970. The decision follows a reduction in oil prices on the international market over the last two months. High oil prices on the international market have been one of the biggest threats hanging over the Rwandan economy.And this should be good enough to free up the Central Bank to ease its monetary policy.The Central Bank maintained a tight monetary policy throughout last year, which is partly why the country has had a better run on inflation, compared to its regional counterparts. Rwanda’s inflation rate eased to 5.92 per cent in June this year from 8.32 per cent in March.Moreover, while inflationary pressures have been subdued, the central bank’s tight monetary policy ensured relatively expensive lending rates.Due to prevailing uncertainties in the global economic situation, there’s no doubt curtailing inflationary pressures remains one of the top policy challenges for government and the Central Bank.But a slight easing of the monetary policy is necessary for the economy to maintain the high growth rate (last year the economy grew by 8.6 per cent).
