Rwanda’s central bank has raised its policy rate to 8.75% from 8.25% as it steps up efforts to contain rising inflation and anchor price expectations.
Governor Soraya Hakuziyaremye announced the 50-basis-point increase at a press conference on Thursday, saying the decision was aimed at limiting inflationary pressures and supporting a return to the bank’s target range.
“This decision… is expected to anchor inflation expectations, limit second-round effects and support inflation’s return to the target range in the second half of 2027,” Hakuziyaremye said.
Rwanda has experienced a sharp increase in inflation in recent months, with the central bank attributing some of the pressure to the consequences of the conflict in the Middle East.
Headline inflation rose to 14.5% year-on-year in July from 13.6% in June, according to data from the country’s statistics office.
The latest rate increase follows previous hikes in February and May as the central bank sought to cool price pressures and bring inflation back within its target range of 2% to 8%.
Hakuziyaremye projected average inflation at 13.1% for 2026, slightly below the previous forecast of 13.9%.
Inflation is expected to moderate further to around 7.9% in 2027, according to the governor.
Meanwhile, the central bank has begun purchasing gold and incorporating the precious metal into Rwanda’s foreign reserves.
Hakuziyaremye said gold currently accounts for between 10% and 15% of the country’s foreign reserves, marking a shift in the composition of its reserve assets.
Despite the inflationary pressures, Rwanda’s economy continued to record strong growth.
Economic growth reached 10% in the first quarter of 2026, up from 6.5% in the corresponding period of the previous year, the governor said.
She added that economic activity remained resilient, supported by strong performances in sectors including services and industry.
The latest policy rate increase underscores the central bank’s efforts to balance strong economic activity with the need to bring inflation back within its target range.
