This is the second quarter that the National Bank of Rwanda (BNR) has maintained its benchmark lending rate. The committee kept the benchmark interest unchanged mainly because of the country’s economic recovery and its subdued inflation.
In June, the BNR lowered its benchmark lending rate for the first time in a year in order to support the country’s economic recovery. This was brought down from 7 per cent. The country’s inflation rate dipped in the month of August to 0.9 per cent from 1.9 per cent in the year to July.
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The key repo rate (policy rate) is used to signal the stance of monetary policy.
The country’s economic growth rate is expected to grow by 5.7 per cent in 2014, according to the World Bank. The country’s second quarter reading reflected a stronger than expected rebound in economic growth by a 10.9 increase compared to a similar period last year. This growth and the World Bank’s forecast indicate that the country may recover faster than expected from the slowdown in economic growth in 2013.
Rwanda’s impressive GDP growth has often approximately been 8 per cent.