The Monetary Policy Committee (MPC) of the National Bank of Rwanda (BNR) has increased the central bank policy rate by 50 basis points to 7.25 per cent in a fight to bring inflation under control.

The decision was announced by the Central Bank Governor Soraya Hakuziyaremye on Thursday, February 19 following the committee deliberations this week.

"In view of more persistent inflationary pressures and an upward revision of the inflation outlook, the monetary policy committee decided to increase the central bank rate," she announced during a press briefing at the bank's headquarters.

Inflation increased to 7.4 per cent in the fourth quarter of 2025 from 5.2 per cent in the same quarter in 2024. It increased further to 8.9 per cent in January this year.

The Governor said that the decision will enable the bank to safeguard price stability which is necessary to sustain economic growth.

"The decision to raise the Central Bank Rate is a measured step we are taking to bring inflation back within the target band between 2 per cent and 8 per cent to safeguard price stability which is a necessary condition to sustain our economic growth as well as protect the purchasing power of Rwandans over the medium term," Hakuziyaremye explained.

According to BNR, inflation is expected to remain elevated for the most part of the year, remaining above the upper band of the target range of 2-8 per cent for the first half of 2026, before coming down by the end of the year.

The Central Bank attributes the outlook to upside risks to inflation, including the possibility of reduced agricultural output, persistent energy-related cost pressures, and ongoing global geopolitical tensions that could disrupt supply chains and keep import prices elevated.