Rwanda Lifts Policy Rate to 7.25%: February Interest Rate Decision
The National Bank of Rwanda (BNR) delivered a 50 basis point increase in its benchmark rate for February 2026, bringing the policy rate to 7.25%. This decision follows a period of steady rates since November 2025, when the rate stood at 6.75%.
Table of Contents
Big-Picture Snapshot
Drivers this month
- Food inflation: +0.22pp
- RWF depreciation: +0.13pp
- Energy costs: +0.09pp
Policy pulse
The 7.25% policy rate now stands 0.5 percentage points above November’s 6.75% and 0.75 points higher than August’s 6.5%. The BNR’s stated inflation target remains 5%[1], making the current stance moderately restrictive.
Market lens
Bond yields rose sharply after the announcement. The surprise hike triggered a selloff in short-term government paper, with the RWF also firming modestly against the USD. Market participants had priced in a hold, so the move recalibrated expectations for further tightening.
Foundational Indicators
Drivers this month
- Headline CPI: 8.1% YoY (January)
- Core inflation: 6.7% YoY
- RWF/USD: -2.4% MoM depreciation
Policy pulse
The central bank’s decision reflects persistent inflation above target, with headline CPI at 8.1% in January versus 7.8% in December. The RWF’s 2.4% monthly slide added to imported price pressures.
Market lens
Equities traded flat post-decision. Financial stocks showed little movement, as the rate hike was seen as a defensive measure rather than a signal of aggressive tightening. Investors remain cautious amid ongoing currency weakness.
Chart Dynamics
Forward Outlook
Drivers this month
- Inflation persistence: +0.19pp
- External deficits: +0.11pp
- Regional monetary tightening: +0.07pp
Policy pulse
With inflation above target and the RWF under pressure, the BNR’s stance is now moderately hawkish. The next decision will weigh imported inflation and domestic demand trends.
Market lens
Forward rates price in stability. Swaps and futures indicate expectations for a hold at the next meeting, barring further inflation surprises. The probability of a further hike is seen at 25–35%, with a base case (60–70%) for no change, and a 5–15% chance of reversal if inflation moderates.
Closing Thoughts
Drivers this month
- Food and fuel costs: +0.16pp
- Currency volatility: +0.10pp
Policy pulse
The 7.25% rate positions Rwanda’s policy at its highest since February 2024, reflecting a decisive response to inflation and exchange rate risks. The BNR’s data-driven approach remains clear.
Market lens
Investor sentiment is cautious but stable. The central bank’s credibility is reinforced by its willingness to act, but sustained inflation or further currency weakness could test market confidence in coming months.
Key Markets Reacting to Interest Rate Decision
Rwanda’s rate hike reverberated across multiple asset classes. While local equities held steady, the RWF’s move against the USD and broader EM currency baskets drew attention. Global investors tracked the decision for signals on regional monetary policy trends. Below are symbols from verified Sigmanomics listings reflecting market sensitivity to Rwanda’s policy:
- AAPL – Global tech bellwether; risk sentiment proxy for EM flows.
- EURUSD – Major FX pair; RWF/USD moves often tracked via EURUSD cross-volatility.
- BTCUSD – Crypto benchmark; EM policy shifts can spur digital asset flows.
| Year | RW Policy Rate (%) | BTCUSD Correlation |
|---|---|---|
| 2020 | 5.0 | -0.12 |
| 2021 | 4.5 | +0.08 |
| 2022 | 6.0 | +0.21 |
| 2023 | 7.5 | +0.17 |
| 2024 | 7.0 | +0.09 |
| 2025 | 6.5 | +0.04 |
| 2026 | 7.25 | +0.15 |
FAQ
- What is the latest Rwanda Interest Rate Decision?
- The National Bank of Rwanda raised its policy rate to 7.25% in February 2026, up from 6.75% in November 2025.
- Why did Rwanda increase its policy rate in February?
- Persistent inflation above the 5% target and RWF depreciation prompted the central bank to raise the rate by 0.5 percentage points.
- How does the February 2026 rate compare historically?
- The 7.25% rate is the highest since February 2024, reversing a period of easing through mid-2025.
Rwanda’s February rate hike marks a renewed focus on inflation control amid currency pressures.
Updated 2/19/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
- Sigmanomics Economic Database, Rwanda Interest Rate Decision, accessed 2/19/26.
- National Bank of Rwanda, Monetary Policy Statement, February 2026.
- Rwanda National Institute of Statistics, CPI and macroeconomic indicators, January 2026.
February’s 7.25% policy rate marks a 0.5 percentage point increase from November’s 6.75%, and sits above the 12-month average of 6.93%. The last hike occurred in August 2024, when the rate was raised to 6.5% from 7% in May 2024. Over the past six decisions, the rate has ranged from 6.5% to 7.5%.
Compared to the November 2023 peak of 7.5%, the current rate is 0.25 points lower, but the upward move reverses the easing bias seen through mid-2025. The decision underscores the central bank’s focus on inflation containment over growth support.