The National Bank of Rwanda (BNR) has raised its key interest rate from 6.5% to 6.75%, ending a period of stability, in a bid to contain inflation and keep it within the bank’s targeted range of 2%to 8%.
According to official figures, consumer price inflation rose slightly to 7.3% in July 2025, up from 7% in June. The central bank noted that although inflation has fluctuated, it has largely remained within the desired band throughout the first half of the year. Projections suggest that inflation will average 7.1% in 2025, before easing to around 5.6% in 2026.
Governor Soraya Hakuziyaremye explained that the decision to raise the benchmark rate to 6.75% was necessary to ensure price stability. “This rate will help us keep inflation within the agreed framework while supporting sustainable economic growth,” she said.
Strong economic growth recorded
BNR emphasized that Rwanda’s economy continues to expand at a strong pace. In the first quarter of 2025, GDP grew by 7.8%, driven by robust performance in the services and industrial sectors, coupled with steady output from agriculture.
The central bank added that despite uncertainties in global trade and supply chains, Rwanda’s economic outlook for the second quarter of 2025 remains positive. Growth is expected to stay strong, again led by services and manufacturing activities.
Trade performance improving
The bank also reported an improvement in Rwanda’s trade balance, thanks to a significant rise in exports. In the second quarter of 2025, the value of exports increased by 15.5%, boosted by a good coffee harvest, higher mineral exports, and favorable global prices.
Non-traditional exports also surged, growing by 31.1%, largely due to increased demand for processed cooking oil and wheat flour produced locally.
On the import side, goods from neighboring countries dropped by 13.2% as regional demand weakened. However, overall imports still rose modestly, by 3.3%, due to higher demand for food products (such as maize and cooking oil used in local processing industries), construction materials, and motor vehicles.
As a result, Rwanda’s trade deficit narrowed by 2.9% in the second quarter of 2025 compared to the same period in 2024.
BNR says the narrowing trade gap reflects the positive impact of export diversification and industrial processing, which continue to reduce the country’s dependence on imports while boosting foreign exchange earnings.
