The National Bank of Rwanda has raised its Central Bank Rate (CBR) by 100 basis points to 8.25 percent, citing rising inflation and growing risks to the economic outlook.
The decision was taken by the Monetary Policy Committee (MPC) on May 20, 2026, after inflationary pressures intensified in the first months of the year. Headline inflation rose to 9.1 percent in Q1 2026, up from 7.4 percent in the previous quarter, before climbing further to 13.0 percent in April.
The central bank said the increase was driven by higher energy, food and core prices, alongside external pressures linked to the Middle East conflict, which has pushed up fuel, gas and transport costs. It revised its average inflation forecast for 2026 upward to 13.9 percent, compared with 9.4 percent in February.
Despite the inflation shock, Rwanda’s economy remains resilient. Real GDP grew by 9.4 percent in 2025, while the Composite Index of Economic Activities rose by 16.5 percent in Q1 2026, signaling continued strong domestic activity.
The country’s external position also improved, with merchandise exports jumping 63.2 percent in Q1 2026 and the trade deficit narrowing by 23.2 percent. The Rwandan franc depreciated by just 0.51 percent against the U.S. dollar, a slower decline than in the same period last year.
The MPC said the higher policy rate is meant to bring inflation back toward the 5 percent target over the medium term, while cautioning that upside risks remain high.
