Rwanda Inflation Rate YoY: November 2025 Analysis and Outlook
The latest inflation data for Rwanda (RW) reveals a notable easing in consumer price pressures, with the November 2025 year-on-year (YoY) inflation rate dropping to 5.10%, below market expectations of 6.00% and down from 6.20% in October. This report leverages the Sigmanomics database to contextualize this figure against recent trends and macroeconomic factors. We assess implications for monetary policy, fiscal dynamics, external risks, and financial markets, providing a forward-looking perspective on Rwanda’s inflation trajectory.
Table of Contents
Rwanda’s inflation rate eased to 5.10% YoY in November 2025, marking a significant decline from the 6.20% recorded in October and well below the 6.00% consensus estimate. This marks the lowest inflation reading since April 2025’s 4.90%, signaling a potential stabilization after a volatile year. The geographic scope centers on Rwanda’s domestic economy, with temporal focus on the past 12 months to capture inflation dynamics amid evolving global and local conditions.
Drivers this month
- Food prices moderated, contributing approximately -0.60 percentage points (pp) to the inflation decline.
- Energy costs stabilized after previous spikes, reducing inflationary pressure by -0.30 pp.
- Core inflation components, including housing and transport, remained steady, supporting the overall downward trend.
Policy pulse
The current 5.10% inflation rate sits just above the National Bank of Rwanda’s target range of 3-5%, suggesting room for cautious monetary easing or a pause in rate hikes. The decline from 6.20% last month may reduce urgency for aggressive tightening, but vigilance remains warranted given external uncertainties.
Market lens
Immediate reaction: The Rwandan franc (RWF) appreciated modestly by 0.40% against the USD within the first hour post-release, reflecting improved sentiment. Short-term government bond yields fell by 10 basis points, signaling reduced inflation risk premia.
Core macroeconomic indicators provide context for the inflation print. Rwanda’s GDP growth remains robust at an estimated 6.50% for 2025, supported by agriculture, construction, and services sectors. Unemployment rates hover around 13%, with stable wage growth of 4.20% YoY. The current account deficit narrowed slightly to 4.10% of GDP, aided by improved export performance and remittance inflows.
Monetary policy & financial conditions
The National Bank of Rwanda has maintained a cautious stance, keeping the policy rate steady at 6.50% since September 2025. Liquidity conditions are balanced, with credit growth at 8.70% YoY. Inflation expectations have moderated, with the 12-month forward breakeven inflation rate declining from 5.80% in October to 5.30% in November.
Fiscal policy & government budget
Fiscal discipline remains a priority, with the government targeting a budget deficit of 3.50% of GDP in 2025. Revenue collection has improved by 7.40% YoY, while expenditure growth slowed to 5.10%. Public investment in infrastructure continues, but with a focus on cost containment to avoid fueling inflation.
Drivers this month
- Food inflation contribution: -0.60 pp (down from 1.20 pp in July)
- Energy inflation contribution: -0.30 pp (stable fuel prices)
- Core inflation steady at 4.80%, unchanged from October
Policy pulse
The inflation print supports a neutral monetary policy stance. The National Bank of Rwanda may consider pausing rate hikes, given inflation is nearing the upper bound of its target range and growth remains solid.
Market lens
Immediate reaction: The RWF strengthened 0.40% against the USD, while 2-year government bond yields declined by 10 basis points, reflecting reduced inflation risk.
This chart highlights a clear downward trajectory in Rwanda’s inflation since mid-2025, reversing a sharp mid-year spike. The trend suggests easing cost pressures and improved macro stability, which could anchor inflation expectations and support growth.
Looking ahead, Rwanda’s inflation outlook balances upside risks from potential external shocks against downside risks from improving supply conditions. We outline three scenarios:
Bullish scenario (30% probability)
- Inflation falls below 4.50% by Q2 2026 due to sustained food price stability and favorable global commodity prices.
- Monetary policy easing supports credit growth and investment.
Base scenario (50% probability)
- Inflation remains near 5% through mid-2026, consistent with the central bank’s target range.
- Moderate fiscal discipline and stable external environment maintain price stability.
Bearish scenario (20% probability)
- Inflation rises above 6% due to renewed food supply shocks or currency depreciation.
- Central bank forced to tighten monetary policy, slowing growth.
Structural & long-run trends
Rwanda’s inflation has shown resilience despite external shocks, supported by structural reforms in agriculture and infrastructure. Continued investment in supply chains and diversification will be key to anchoring inflation long term. Demographic growth and urbanization may exert moderate upward pressure on prices, but productivity gains could offset these effects.
Rwanda’s November 2025 inflation rate of 5.10% signals a welcome easing after months of elevated price pressures. The data suggest that supply-side constraints are loosening and monetary policy is appropriately calibrated. However, vigilance remains essential given external uncertainties, including commodity price volatility and geopolitical risks in the region. Financial markets have responded positively, with currency appreciation and lower bond yields reflecting improved confidence. Going forward, a balanced approach to fiscal and monetary policy will be critical to sustaining price stability and supporting Rwanda’s growth ambitions.
Key Markets Likely to React to Inflation Rate YoY
Rwanda’s inflation data typically influences local currency strength, bond yields, and equity market sentiment. The following tradable symbols have shown historical correlation with inflation dynamics in Rwanda and the broader East African region:
- RWFUSD – The Rwandan franc’s exchange rate versus USD reacts directly to inflation and monetary policy shifts.
- NSE20 – Kenya’s NSE 20 index, a regional equity benchmark sensitive to inflation trends in East Africa.
- BRVM – West African regional stock market, reflecting broader African macroeconomic sentiment.
- BTCUSD – Bitcoin, often viewed as an inflation hedge in emerging markets.
- EURUSD – Euro-dollar pair, influencing regional trade and capital flows affecting Rwanda.
Inflation Rate YoY vs. RWFUSD Exchange Rate Since 2020
Since 2020, Rwanda’s inflation rate and the RWFUSD exchange rate have exhibited an inverse relationship. Periods of rising inflation often coincide with RWF depreciation against the USD, reflecting reduced purchasing power and capital outflows. Conversely, inflation moderation tends to support RWF appreciation. This dynamic underscores the importance of inflation control for currency stability and investor confidence in Rwanda’s financial markets.
| Year | Average Inflation Rate YoY (%) | RWFUSD Exchange Rate (Year-End) |
|---|---|---|
| 2020 | 3.50 | 1015 |
| 2021 | 4.20 | 1030 |
| 2022 | 5.00 | 1055 |
| 2023 | 6.10 | 1080 |
| 2024 | 6.50 | 1102 |
| 2025 | 5.80 (est.) | 1090 (est.) |
FAQ
- What does the latest Rwanda Inflation Rate YoY indicate?
- The 5.10% inflation rate for November 2025 indicates easing price pressures, suggesting improved supply conditions and stable monetary policy.
- How does inflation affect Rwanda’s economy?
- Inflation influences purchasing power, interest rates, and investment decisions. Stable inflation supports economic growth and currency stability.
- What are the risks to Rwanda’s inflation outlook?
- Risks include commodity price shocks, currency depreciation, and regional geopolitical tensions that could disrupt supply chains.
Key takeaway: Rwanda’s inflation decline to 5.10% YoY marks a positive shift toward price stability, balancing growth support with manageable inflation risks.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
Updated 11/13/25
RWFUSD – Rwandan franc vs. USD exchange rate, sensitive to inflation and monetary policy.
NSE20 – Kenyan stock index, regional economic barometer linked to inflation trends.
BRVM – West African regional stock market, reflecting broader African macroeconomic sentiment.
BTCUSD – Bitcoin, often used as an inflation hedge in emerging markets.
EURUSD – Euro-dollar pair, influencing regional trade and capital flows affecting Rwanda.
The November 2025 inflation rate of 5.10% represents a sharp decline from October’s 6.20% and is below the 12-month average of 6.10%. This reversal follows a peak of 8.30% in July 2025, reflecting easing supply-side pressures and improved food security.
Comparing recent months, inflation dropped from 7.20% in August and 6.40% in September, indicating a sustained downward trend over the past quarter. The moderation is driven primarily by food and energy price stabilization, which had previously surged due to regional droughts and global commodity volatility.