The National Bank of Rwanda (BNR) has raised its key policy interest rate from 6.75% to 7.25%, an increase of 0.50 percentage points, as part of efforts to curb rising inflationary pressures in the economy.
The decision was announced on 19 February 2026 following a meeting of the Monetary Policy Committee, which reviewed developments in the domestic and global economy, as well as inflation outlook projections.
Data shows that inflation rose to 7.4% in the fourth quarter of 2025, up from 7.2% in the third quarter. At the beginning of 2026, inflation accelerated further to 8.9%, exceeding BNR’s target range of 2% to 8%.
BNR Governor Soraya Hakuziyaremye said the increase in inflation was mainly driven by higher energy prices, rising costs of perishable food items, electricity tariff adjustments toward the end of 2025, as well as increased prices for health and education services.
“Based on the continued inflationary pressures and the risk that they could intensify, the Committee decided to raise the policy rate in order to bring inflation back within the desired range,” she said.
Measure to Tackle Rising Prices
The central bank explained that raising the policy rate is one of the key tools used to reduce excess liquidity in the economy. By limiting the amount of money circulating in the market, the measure helps slow down price increases and protect consumers’ purchasing power.
When the policy rate rises, commercial banks typically increase interest rates on loans, which reduces borrowing. This, in turn, lowers spending in the economy and eases pressure on the prices of goods and services.
BNR said it will continue to closely monitor inflation trends and remains ready to take additional measures if necessary, with the aim of maintaining price stability while continuing to support sustainable economic growth in Rwanda.
