Friday, March 16, 2012

National Bank of Rwanda Holds Interest Rate at 7.00%

The National Bank of Rwanda held its key repo rate unchanged at 7.00%.  Bank Governor, Claver Gatete, said: "The monetary and exchange rate policy implemented to date continues to sustain Rwanda's macroeconomic stability. The financial sector is sound and resilient to external shocks, inflation remains moderate and the Rwandan Franc is stable.  In the second quarter of 2012, headline inflation is expected to remain stable as a result of pursuing tight monetary policy, good coordination between the monetary and fiscal policies and other Government policy measures aiming at mitigating exogenous supply shocks that include high oil prices and sovereign debt in the Euro zone."

The Bank previously increased the repo rate by 50 basis points in November and October, meanwhile the bank last reduced the interest rate 100bps to 6.00% in November last year.  Rwanda  recorded annual inflation of 7.85% in February, compared to 7.5% in August, 5.82% in June, and just 1.09% in January last 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 Rwandan Franc (RWF) last traded around 607 against the US dollar, having weakened about 1% so far this year.


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