Rwanda Lowers Key Repo Rate to 6.25%, First Reduction Since 2014

by

Saul Butera

December 28, 2016, 1:16 PM GMT+3 December 28, 2016, 1:39 PM GMT+3

Rwanda’s central bank cut its benchmark interest rate for the first time in two-and-a-half years to support flagging economic growth as inflation eased in the East African nation.
The Monetary Policy Committee reduced the key repo rate to 6.25 percent from 6.5 percent, after leaving it unchanged since June 2014.

John Rwangombwa

Photographer: Kimihiro Hoshino/AFP via Getty Images

“The lowering of the key repo rate is to signal the banks to increase lending to the private sector and support growth,” Governor John Rwangombwa told reporters Wednesday in the capital, Kigali.

The central bank forecasts the inflation rate at about 6 percent by the end of 2016 after it slowed to 6.4 percent in November from 7.4 percent in the previous month. Economic growth may also decelerate to 6 percent this year, from 6.9 percent in 2015, Rwangombwa said.
The franc has weakened about 9 percent against the dollar this year as Rwanda’s earnings from mineral exports shrank