The National Bank of Rwanda raised its key repo rate 50bps to 6.50% from 6.00% previously, with the interbank interest rate corridor changing to 4.50-8.50% and the discount rate now 10.50%. Bank Governor, Claver Gatete, said: "the real economic growth in Rwanda is likely to exceed the 7 percent initially projected for the year 2011. It is expected to reach 8.8 percent whereas the inflation forecast is at 8.2 percent by end December 2011. Considering these projections, the Central Bank finds it appropriate to review its policy rate in order to keep the monetary aggregates at optimal levels to limit inflation pressures while continuing to support economic growth."
At its August meeting the Bank also held the key monetary policy interest rate unchanged at 6.00%, meanwhile the bank last reduced the interest rate 100bps to 6.00% in November last year. Rwanda has seen inflation pick up to 7.5% in August, compared to 5.82% in June, and just 1.09% in January this year.
According to IMF data Rwanda saw annual GDP growth of 5.39% during 2010, meanwhile the IMF recently scaled down its growth estimate for Rwanda to 7% for 2011, from a previous forecast of 7.5%. The Bank said that Rwanda has recorded broad money supply growth of 18% in the year to August, compared to a target of 16% for 2011. The Rwandan Franc (RWF) last traded around 600 against the US dollar.