Central bank keeps key repo rate at 7.5per cent

The National Bank of Rwanda maintained the Key Repo Rate which it uses to influence lending rates and liquidity in the banking system at 7.5 per cent, saying the economy was stable and inflationary pressure were easing. Rwanda’s inflation rate cooled from 8.3 per cent in December last year to 5.8 per cent in August this year.The central bank’s decision follows steady rise in credit to private sector. Official figures show that credit to the private sector increased to Rwf642 billion in August, this year, compared to Rwf483.8 billion in same period last year.The Bank said credit volumes were good enough to keep the economy growing. Rwanda’s economy is projected to grow at 7.7 per cent this year compared to 8.6 per cent last year.The economy has remained afloat despite persistent uncertainties in the global economic and financial environment.The economy expanded by 7.7 per cent in the first three months of this year, in line with government and International Monetary Fund (IMF) projections, mainly driven by the service industry.“Going forward, we don’t see much pressure from the region and imported inflation has declined to 1.2 per cent, from 8.6 per cent, end last year,” Gatete said at a news briefing on Tuesday, shortly after the central bank’s monetary policy committee meeting. “Global inflation is low, interest rates are low and fuel prices are declining or stable.” The Central bank says inflation has begun to moderate in the region with significant decline in Kenya to 6 per cent in August from 10.1 per cent in June. However, it remains in double digits in Tanzania and Uganda, where it stands at 14.9 per cent and 11.9 per cent, respectively. Burundi has the highest inflation rate in the region- at 17 per cent -due to rising housing, water and energy prices.

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Central bank keeps key repo rate at 7.5per cent