The National Bank of Rwanda (BNR) held its quarterly Monetary Policy Committee (MPC) meeting on November 18, 2025, reviewing recent global and domestic economic developments and updating its projections for the year ahead. Following this assessment, the MPC decided to maintain the Central Bank Rate (CBR) at 6.75 percent, a stance the BNR considers appropriate for keeping inflation within the target range while supporting steady economic growth.
Rwanda’s inflation environment played a central role in this decision. Headline inflation rose to 7.2 percent in the third quarter of 2025, up from 6.7 percent in Q2. The increase was driven mainly by higher core inflation, which jumped from 5.6 percent to 8.1 percent, and energy inflation, which rose from -0.1 percent to 3.3 percent. This upward pressure was partially offset by easing fresh food inflation, which declined to 5.6 percent from 12.4 percent. Despite this rise, inflation remains within the 2–8 percent target band. Projections show headline inflation averaging 6.9 percent in 2025 and 5.8 percent in 2026, with core inflation expected to remain elevated until early 2026 before gradually easing. While the outlook is broadly positive, inflation risks persist, particularly from global geopolitical tensions and potential weather-related shocks affecting domestic food supply.
On the domestic front, the economy has maintained strong momentum. In the second quarter of 2025, Rwanda recorded 7.8 percent GDP growth, supported by solid performance across agriculture, industry, and services. Momentum carried into the third quarter, with the Composite Index of Economic Activities (CIEA) rising by 13.2 percent, signaling sustained expansion in aggregate demand. This growth was primarily driven by stronger activity in services and industrial sectors, reinforcing Rwanda’s resilience amid global uncertainties.
External sector dynamics also influenced the MPC’s decision. In 2025Q3, merchandise exports grew by 15.0 percent, lifted by higher coffee and mineral exports and favorable global commodity prices. Non-traditional exports, such as cooking oil, wheat flour, and animal feeds, rose sharply by 50.5 percent, highlighting ongoing industrial diversification efforts. Imports increased by 7.4 percent due to higher demand for consumer goods, especially medicine and corn, causing the trade deficit to widen slightly by 2.8 percent. Nonetheless, the foreign exchange market showed improved stability. By the end of September 2025, the Rwandan franc had depreciated 4.03 percent year-to-date against the U.S. dollar, an improvement compared to 6.49 percent during the same period last year. This moderation reflects global dollar weakness and strengthened foreign exchange market regulations aimed at curbing speculation.
Financial sector conditions also supported the MPC’s decision to maintain the CBR. Market rates continued to fall in response to earlier policy adjustments. The interbank rate declined by 140 basis points to 5.85 percent in Q3 2025 compared to 7.25 percent a year earlier. Deposit rates dropped to 8.67 percent, reflecting ample liquidity within the banking system. Lending rates also eased slightly to 15.78 percent, with declines observed across various loan tenors. Combined with a strong banking sector, characterized by high capitalization, low non-performing loans, and robust credit growth, these trends illustrate a financial environment supportive of both investment and stability.
Looking ahead, the MPC emphasized continued vigilance. While inflation is projected to remain within target, risks linked to weather variability, global geopolitical tensions, and potential supply chain disruptions could exert upward pressure on prices. At the same time, strong economic activity, improved external stability, and easing market interest rates provide room for monetary policy to remain supportive of growth without undermining price stability.
In light of these conditions, the MPC concluded that maintaining the CBR at 6.75 percent is the most appropriate stance for the next quarter. The National Bank of Rwanda reaffirmed its commitment to closely monitoring economic developments and stands ready to adjust its policy should new risks emerge. This balanced approach aims to preserve Rwanda’s macroeconomic stability while sustaining the positive growth trajectory observed throughout 2025.
Read: Monetary Policy Stance: Sustaining Growth Guarding Against Inflationary Risks