Rwanda tightened monetary policy again because inflation pressures persist despite improving economic conditions.
On Thursday, Governor Soraya Hakuziyaremye and the National Bank of Rwanda raised the key rate by 50 basis points to 7.25%.
This increase marks the bank’s largest adjustment since August 2023.
Consequently, Rwanda signals a strong focus on price stability, while peers consider easing.
Rwanda Fight Inflation
The Monetary Policy Committee emphasised that it will restore inflation to the 2–8% target range.
Moreover, it will adjust future policy depending on economic risks and inflation trends.
Hakuziyaremye explained that the committee will monitor developments closely and act if risks rise.
Meanwhile, the Rwandan franc depreciated 4.40% against the US dollar by December 2025, slower than the 9.42% decline recorded in 2024.
The central bank attributed the improvement to stronger tourism earnings, rising remittances, foreign-exchange reforms, and a weaker US dollar.
Read Also: South Africa Inflation Slows To 3.5%, Rate Cut Likely
Price Pressure
Despite policy measures, inflation continues to rise.
Annual urban inflation climbed to 8.9% last month, reaching a two-year high.
By contrast, it measured 8% in December, showing persistent price pressures.
The central bank predicts inflation will remain slightly above 8% early in 2026, but expects it to return to the target range later.
Therefore, policymakers anticipate gradual moderation if current measures remain effective.
Africa Comparison
Rwanda’s move contrasts with trends across Africa.
For instance, the South African Reserve Bank kept its benchmark rate at 6.75%, reflecting caution as inflation moderates.
Similarly, the Central Bank of Nigeria retained its Monetary Policy Rate at 27% in November 2025, after reducing it from 27.5% in September.
Nigeria will hold its 304th MPC meeting on February 23–24, 2026, and markets will watch for guidance.
Overall, Rwanda’s rate hike demonstrates a firm stance prioritising inflation control over early easing.
