KIGALI, May 30 (Xinhua) -- Rwanda's central bank has decided to reduce its key interest rate from 7.5 percent to 7.0 percent.
John Rwangombwa, governor of the National Bank of Rwanda, announced the decision at a press briefing Wednesday in Kigali, the capital city, noting risks from global geopolitical tensions and potential adverse weather conditions.
The Monetary Policy Committee decided to lower the central bank rate (CBR) by 50 basis points, expecting inflation to remain at around 5.0 percent in 2024 and 2025.
In the first quarter of 2024, headline inflation fell to 4.7 percent, down from 8.9 percent in the previous quarter, driven by falls in core and fresh food inflation, despite a rise in energy inflation due to higher solid fuel prices.
Rwangombwa said inflation is projected to stay at around the medium-term target of 5.0 percent, supported by easing food inflation and normalized domestic agricultural production.
The economy grew by 10.0 percent in the last quarter of 2023, achieving 8.2 percent overall growth for the year, driven by strong performances in services and industry.
The growth momentum is expected to continue, with the Composite Index of Economic Activities rising by 8.6 percent in the first quarter of 2024.
The financial sector also remains stable and growing. ■
