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National Bank of Rwanda raises its central bank rate to 8.75%

1 min read

Stack of banknotes and coins beside a calculator on a desk overlooking Kigali Finance and Markets
Stack of banknotes and coins beside a calculator on a desk overlooking Kigali

The third increase of 2026 takes the rate up 50 basis points as inflation reached 14.5% in July; the bank expects inflation back in the target range in the second half of 2027.

The Monetary Policy Committee of the National Bank of Rwanda (BNR) raised the central bank rate by 50 basis points to 8.75% at its meeting on 26 August 2026, the bank said in a press release. It is the third increase this year, after rises to 7.25% in February and 8.25% in May.

Inflation increased from 9.1% in the first quarter of 2026 to 13.2% in the second quarter and reached 14.5% in July. The BNR projects an average of 13.1% for 2026, slightly below its previous forecast of 13.9%. It named the El Niño climate pattern and continued tension in the Middle East as risks that could keep food and commodity prices high.

The bank said the decision is meant to anchor inflation expectations and limit second-round effects, and that it expects inflation to return to the 2–8% target range in the second half of 2027.

The economy grew 10.0% in the first quarter of 2026, and the composite index of economic activities rose 10.9% in the second quarter. Merchandise exports increased 51.0% in the second quarter, mainly on mineral exports, but imports grew 28.0% and the trade deficit widened 13.8% to US$821.9 million. The Rwandan franc fell 0.87% against the US dollar in the first half of the year, compared with 2.96% a year earlier.

For borrowers, the BNR's October financial stability statement noted that retail lending rates have not yet followed the policy rate: the average lending rate was 15.78% in the first half of 2026, slightly lower than a year earlier.

Sources