Rwanda’s central bank has raised its key policy rate by 100 basis points to 8.25 percent in response to rising inflationary pressures and heightened risks to the economic outlook.
The Monetary Policy Committee of the National Bank of Rwanda (National Bank of Rwanda) announced the decision on Thursday, saying the move is aimed at bringing inflation back toward its medium-term target and stabilising macroeconomic conditions.Governor Soraya Hakuziyaremye said the rate increase reflects the central bank’s commitment to price stability, which she described as essential for protecting household purchasing power and supporting broader economic stability.
The latest hike follows a previous 50-basis-point increase in February, when the policy rate was raised to 7.25% as part of ongoing efforts to contain inflation.
Inflation in Rwanda has accelerated sharply in recent months. Headline inflation rose to 9.1 percent in the first quarter of 2026, up from 7.4 percent in the previous quarter, driven by increases in food, energy and core prices.
More recent data shows inflation climbing further to 13 oercent in April, well above the central bank’s target range of 2% to 8%, intensifying pressure on policymakers to tighten monetary conditions.
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The central bank said the policy tightening, combined with government measures to reduce inflationary pressures, is expected to help bring inflation back toward the 5 percent medium-term target.
It also revised its inflation forecast upward, projecting an average inflation rate of 13.9% for 2026, compared with an earlier estimate of 9.4 percent.
The revision reflects both domestic and external factors, including higher global energy costs linked to geopolitical tensions in the Middle East, as well as increased transport costs caused by disruptions to global shipping routes.
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Authorities noted that fuel and gas price pressures have been amplified by rerouting of trade flows following logistical disruptions in key maritime corridors.
The central bank said the current tightening cycle is intended to anchor inflation expectations while preserving financial stability, as Rwanda continues to balance growth objectives with price stability concerns.
Economists say the sharp rise in inflation marks one of the most significant price pressures Rwanda has faced in recent years, driven largely by imported inflation and supply-side shocks.
The National Bank of Rwanda said it will continue to monitor economic developments closely and adjust policy as needed to ensure inflation returns to its target range over the medium term.
The decision signals that monetary authorities in Kigali are likely to maintain a cautious stance in the coming months as they assess the impact of tighter financial conditions on credit growth and economic activity.
