Rwanda Central Bank May Keep Rates Unchanged: Governor

Rwanda’s central bank will probably keep its key interest rate unchanged this year as inflation remains below 10 percent and better harvests support growth in the East African economy, Governor John Rwangombwa said.

“I expect it to remain more or less the same for the rest of the year,” Rwangombwa said in an interview today in Cape Town, where he is attending the World Economic Forum on Africa. “I don’t think we need to make any big changes in our monetary policy. We see stability in our economy.”

The National Bank of Rwanda left its main policy rate unchanged at 7.5 percent for a fourth meeting in March to curb inflationary pressure after the suspension of aid by donors including the U.K. and World Bank last year caused the franc to drop to a record low against the dollar. Donors have resumed aid to Rwanda and the sale of the nation’s debut $400 million Eurobond last month helped to boost foreign-currency reserves, supporting the franc, Rwangombwa said.

Inflation, which slowed to 3.3 percent in March, will probably end the year at about 5 percent, the governor said. The currency’s depreciation may be contained to less than 2 percent against the dollar, Rwangombwa said.

The franc has weakened 2.1 percent against the dollar so far this year. The currency traded unchanged at 645 per dollar as of 9:56 a.m. in Kigali, Rwanda’s capital.

The International Monetary Fund forecast last month that the inflation rate may climb to 7.5 by December.

Rwangombwa was finance minister of Rwanda for more than three years until he was appointed as head of the central bank in February.

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