Rwanda's central bank lowers policy rate to sustain growing domestic demand

Source: Xinhua| 2019-05-06 22:11:25|Editor: xuxin
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KIGALI, May 6 (Xinhua) -- The Rwandan central bank said Monday that it has lowered its policy lending rate to 5 percent, down from 5.5 percent, to sustain growing domestic demand and increase credit to the private sector.

After assessment, the Monetary Policy Committee of the National Bank of Rwanda observed domestic demand continued to improve in the first quarter of 2019, supported by growing credit to the private sector, central bank governor John Rwangombwa told a news conference in the Rwandan capital, Kigali.

Outstanding credit to the private sector and new authorized loans increased at a higher pace, growing at 16.2 percent and 24.9 percent in the first quarter of 2019, from 7.3 percent and 7.4 percent of the same quarter of 2018.

The trend is expected to continue throughout 2019, supported by a more accommodative policy stance, Rwangombwa said.

The headline inflation rate is projected to rise to 3 percent by the end of the year, from an average of 1.4 percent in 2018, the governor said.

Rwangombwa noted that inflation expectations are well anchored within the target range, and economic growth prospects are improving.