The Central Bank of Rwanda (BNR) has raised its base interest rate for commercial banks from 6.5% to 7% in order to prevent excessive price increases in the market and continue to support the economy. ‘economy.
It was a decision made at the meeting of the Monetary Policy Committee of this quarter that met this Sunday. This meeting determines the base interest rate of the Central Bank for the next three months.
Rwangomba said that at the international level, the prices are decreasing, things that can help Rwanda to have its prices decrease.
It is expected that at the end of 2023 there will be a change in the reduction of prices so that it can go below 8%.
“What’s going down is speed, not overall prices. It’s only too often that food is reduced and returned to the ground when we have a good harvest. That’s one particular thing we see that will help keep costs down.
The BNR predicts that prices will remain high in the first half of 2023 but that the rate of growth will slow down to below 8% by the end of this year.
In explaining how prices rise and fall, Rwangomba used an example, for something that costs 500 Frw in February this year, saying that while it will be increased by 200 Frw in March, it will mean that the price increase has increased by 200 Frw.
He said, “Even in the fourth month because you are comparing the fourth month of last year. By the second of the next year there was no more growth, at which point the growth would stop. Sometimes it stays high but we are comparing the second month of this year with last year, how the prices were.
“Something went up in the tenth month of last year, and today we still see it as having gone up compared to what it was like last year.”
On the other hand, the Central Bank of Rwanda says that the economy remains stable thanks to the measures put in place to combat the effects of the Covid-19 epidemic.
In the first three quarters of 2022, the country’s gross domestic product increased by 8.5% after a growth of 10.9% in 2021 and a decline of 3.4% in 2020.
Rwanda’s imports increased by 31.4% in 2022 while its imports increased by 23.6%. The gap between exports and imports increased by 19.1%.
The value of the Rwandan currency compared to the US dollar has decreased by 6.05% in 2022 compared to 3.82% in 2021.
In the year 2022, Rwanda had enough foreign exchange reserves to help import goods and services for 4.2 months.
