Rwanda’s inflation rate MoM for November 2025 registered at 1.00%, according to the latest data from the Sigmanomics database. This figure is a notable decline from October’s 1.30% and well below the 1.50% consensus estimate. Over the past 12 months, inflation has averaged approximately 0.85% MoM, with a peak of 2.30% in May 2025. The current moderation reflects easing pressures on food and energy prices, which had driven earlier spikes.

Drivers this month

• Food prices eased, contributing -0.15 percentage points to inflation.
• Stable fuel prices maintained energy inflation near zero.
• Housing and transport costs rose modestly, adding 0.10 percentage points.

Policy pulse

The current inflation rate sits slightly above the National Bank of Rwanda’s target band of 0.80–1.00% MoM, suggesting a cautious stance. The central bank has maintained accommodative monetary policy, balancing growth support with inflation containment.

Market lens

Immediate reaction: The Rwandan franc (RWF) appreciated marginally by 0.10% against the USD in the first hour post-release, while 2-year government bond yields remained stable. Breakeven inflation swaps showed a slight downward adjustment, reflecting tempered inflation expectations.

Core macroeconomic indicators provide context for the inflation reading. Rwanda’s GDP growth remains robust at an estimated 6.50% YoY, supported by agriculture and services. Unemployment holds steady near 14%, while wage growth is moderate at 3.20% YoY. The fiscal deficit narrowed to 3.80% of GDP in Q3 2025, reflecting prudent government spending and improved revenue collection.

Monetary policy & financial conditions

The National Bank of Rwanda has kept the policy rate at 5.50% since mid-2025. Liquidity conditions remain ample, with credit growth steady at 8% YoY. Inflation expectations are anchored but sensitive to external shocks, especially commodity price swings and regional trade disruptions.

Fiscal policy & government budget

Fiscal discipline continues to underpin macro stability. The government’s budget prioritizes infrastructure and social programs while containing recurrent expenditures. Debt-to-GDP ratio stands at 42%, manageable but warranting careful monitoring amid global tightening.

External shocks & geopolitical risks

Rwanda faces external risks from fluctuating global food and fuel prices, exacerbated by ongoing geopolitical tensions in East Africa. Regional trade frictions and currency volatility in neighboring countries could spill over, impacting inflation and growth.

Drivers this month

• Food inflation contribution: -0.15 pp (down from 0.30 pp in October)
• Energy inflation contribution: ~0.00 pp (stable fuel prices)
• Housing & transport: 0.10 pp (steady increases)

Policy pulse

Inflation remains within the central bank’s tolerance range but closer to the upper bound. This supports a wait-and-see approach, with potential tightening if inflationary pressures re-emerge.

Market lens

Immediate reaction: The RWF strengthened slightly, reflecting confidence in inflation control. Short-term bond yields held steady, indicating stable risk perceptions.

Looking ahead, inflation in Rwanda faces a mix of upside and downside risks. The baseline scenario projects inflation averaging 0.90–1.10% MoM over the next quarter, supported by stable commodity prices and continued fiscal prudence.

Bullish scenario (20% probability)

• Global commodity prices fall sharply, easing food and energy costs.
• Improved regional trade integration reduces supply bottlenecks.
• Inflation dips below 0.80% MoM, allowing for monetary easing.

Base scenario (60% probability)

• Inflation remains stable around 1.00% MoM.
• Monetary policy stays accommodative but vigilant.
• Fiscal discipline continues, supporting macro stability.

Bearish scenario (20% probability)

• Geopolitical tensions disrupt supply chains, pushing food prices higher.
• Currency volatility triggers imported inflation pressures.
• Inflation rises above 1.50% MoM, prompting monetary tightening.

Rwanda’s November 2025 inflation rate MoM reading of 1.00% signals a welcome easing after earlier volatility. The interplay of stable monetary policy, fiscal discipline, and external factors will shape the inflation trajectory in coming months. Policymakers must remain alert to external shocks and structural challenges, including regional trade dynamics and commodity price volatility. Financial markets have so far digested the data calmly, reflecting confidence in Rwanda’s macroeconomic management. Long-run trends toward improved supply chains and economic diversification offer further support for inflation stability.

Inflation Rate MoM vs. USDRWF Since 2020

Since 2020, Rwanda’s monthly inflation rate has shown a moderate positive correlation with the USDRWF exchange rate. Periods of rising inflation often coincide with RWF depreciation, reflecting imported inflation pressures. For example, spikes in inflation during mid-2025 aligned with a 3% weakening of the RWF against the USD. This relationship underscores the importance of currency stability in managing inflation expectations and monetary policy effectiveness.

FAQs

What is the latest Inflation Rate MoM for Rwanda?

The most recent inflation rate MoM for Rwanda is 1.00% for November 2025, down from 1.30% in October.

How does Rwanda’s inflation compare historically?

November’s 1.00% is below the May 2025 peak of 2.30% and slightly above the 12-month average of 0.85%, indicating moderation.

What are the macroeconomic implications of this inflation reading?

The reading suggests stable inflationary pressures, supporting accommodative monetary policy but requiring vigilance against external shocks.

Takeaway: Rwanda’s November inflation moderation reflects effective macro management amid external risks, but policymakers must stay alert to evolving global and regional dynamics.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.