Kigali, Rwanda – The National Bank of Rwanda has increased its benchmark interest rate by 50 basis points to 7.25 percent in an effort to curb near-term inflation, bucking a broader easing trend across Africa.
Okay News reports that Governor Soraya Hakuziyaremye announced the decision on Thursday following the Monetary Policy Committee meeting. The move is the biggest taken by the bank since August 2023 and sets Rwanda apart from peers that are either holding rates steady or considering cuts as inflationary pressures moderate across the continent.
The MPC stated it would remain vigilant in its anti-inflation fight within its medium-term target. The bank added that further decisions will depend on its assessment of economic risks going forward. Hakuziyaremye said the committee will continue to closely monitor economic developments and the inflation outlook. Should upside risks materialise, the committee will assess the need for further policy adjustments to ensure inflation converges to the target range of 2 to 8 percent over the medium term.
She noted that the Rwandan Franc depreciated by 4.40 percent against the U.S. dollar as of December 2025, marking a slower pace compared to the 9.42 percent depreciation recorded over the same period in 2024. This trend reflects improved external sector conditions, supported by stronger tourism receipts and increased remittance inflows, which helped ease foreign exchange pressures. It also mirrors the positive effects of domestic foreign exchange market reforms, alongside the relatively weaker U.S. dollar in global markets.
Annual urban inflation climbed to a more than two year high of 8.9 percent last month, from 8 percent in December. The bank expects inflation to remain slightly above the 8 percent upper bound in the first half of 2026 but to ease back within the target range before the year runs out. The decision sets Rwanda apart from much of Africa, where policymakers in South Africa and Nigeria are still expected to cut rates as firmer currencies and lower oil prices help cool inflation.
The move reflects Rwanda’s determination to tackle persistent inflationary pressures despite regional trends toward easing.
