Central Bank of Rwanda cuts interest rate to 5 pct to sustain growing domestic demand

The Central Bank of Rwanda has reduced its benchmark interest rate to a record low to sustain growing domestic demand.

After assessment, the Monetary Policy Committee of the National Bank of Rwanda observed domestic demand continued to improve in the first quarter of 2019, supported by growing credit to the private sector, central bank governor John Rwangombwa told a news conference in the Rwandan capital, Kigali, Xinhua noted.

The bank’s Monetary Policy Committee cut the rate by 50 basis points to 5 percent, Governor John Rwangombwa said in a statement handed to reporters Monday in the capital, Kigali.

The landlocked country, Rwanda has experienced deflation in food prices because of improved agricultural output. The bank sees the headline inflation rate rising to 3 percent by the end of the year from an average of 1.4 percent in 2018, the governor said.

The bank in March introduced inflation targeting, seeing price growth in a range of 2 percent to 8 percent, and preferring it at about 5 percent. The economy expanded 8.6 percent last year, and will probably grow 7.8 percent this year, he said, as reported by Bloomberg.

JUST IN: The National Bank of #Rwanda cuts the Central Bank Rate(CBR) by 50 basis points (From 5.5 percent to 5.0 percent) to sustain growing domestic demand. Read the full press statement. https://t.co/ZXorbYjmB4 #MPC2019 pic.twitter.com/Oe4DkNpBrj

— National Bank Rwanda (@CentralBankRw) May 6, 2019

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