The National Bank of Rwanda (BNR) announced on November 20, 2025, that the benchmark interest rate remains unchanged at 6.75%. This marks the third consecutive decision holding rates steady after a series of cuts from 7.50% in November 2023. The decision aligns with the central bank’s dual mandate to support growth while containing inflationary risks amid evolving domestic and external conditions.

Drivers this month

• Inflation steady at 4.80% YoY, close to the 5% target.
• GDP growth estimated at 5.10% YoY, slightly below the 5.50% forecast.
• Moderate currency volatility amid regional geopolitical tensions.

Policy pulse

The 6.75% rate sits marginally above the 12-month average of 6.60%, reflecting a cautious stance. The central bank balances inflation containment with the need to sustain credit growth, which expanded 7.20% YoY in Q3 2025.

Market lens

Immediate reaction: The Rwandan franc (RWF) appreciated 0.30% against the USD within the first hour post-announcement, while 2-year government bond yields edged down 5 basis points, signaling market approval of the steady policy.

Core macroeconomic indicators provide context for the interest rate decision. Rwanda’s inflation rate has moderated from a peak of 7.20% in mid-2024 to 4.80% in October 2025, supported by stable food prices and subdued energy costs. Meanwhile, GDP growth remains robust but slightly decelerated compared to 2024’s 6.00% expansion.

Inflation and growth trends

• Inflation: 4.80% YoY (October 2025), down from 6.10% YoY in November 2024.
• GDP growth: 5.10% YoY in Q3 2025, compared to 5.80% in Q3 2024.
• Credit growth: 7.20% YoY, supporting private sector activity.

Fiscal policy & government budget

The government’s fiscal deficit widened slightly to 4.30% of GDP in FY2025, up from 3.80% in FY2024, driven by increased infrastructure spending. Debt-to-GDP ratio remains manageable at 52%, but rising borrowing costs could pressure future budgets.

External shocks & geopolitical risks

Regional instability, particularly in the Great Lakes area, poses risks to trade and investment. Additionally, global commodity price fluctuations, especially in oil and food, could impact inflation and the current account balance.

Comparing the current rate to historical data, the 6.75% level is 75 basis points below the peak in November 2023 and 25 basis points above the August 2024 trough of 6.50%. This moderate stance balances growth support with inflation vigilance.

Market lens

Immediate reaction: The RWF strengthened modestly, while short-term bond yields declined, reflecting market trust in the central bank’s steady approach. Breakeven inflation expectations remain anchored near 5%, indicating confidence in price stability.

Looking ahead, Rwanda’s monetary policy faces a complex environment. Inflation risks from global commodity prices and regional instability could prompt tightening, while growth headwinds from fiscal deficits and external shocks may require accommodative measures.

Bullish scenario (30% probability)

• Global commodity prices stabilize or decline.
• Regional peace improves trade flows.
• Inflation remains near target, allowing gradual rate cuts to 6.25% by mid-2026.

Base scenario (50% probability)

• Inflation hovers around 5%.
• Growth steady at 5% YoY.
• Rates remain at 6.75% through 2026, with minor adjustments possible.

Bearish scenario (20% probability)

• Commodity price shocks push inflation above 6%.
• Fiscal deficits widen, pressuring debt sustainability.
• Central bank hikes rates to 7.25% to contain inflation.

Structural & long-run trends

Rwanda’s long-term outlook benefits from structural reforms in financial inclusion, digital payments, and export diversification. These trends support a gradual decline in real interest rates and improved macro stability over the next decade.

The November 2025 interest rate decision reflects a balanced approach by the National Bank of Rwanda amid evolving domestic and external challenges. Maintaining the rate at 6.75% supports steady growth and inflation near target. However, vigilance is warranted given fiscal pressures and geopolitical risks. Market reactions suggest confidence in the central bank’s policy framework, but future adjustments remain contingent on inflation dynamics and external shocks.

Investors and policymakers should monitor inflation trends, fiscal developments, and regional stability closely. The interplay of these factors will shape Rwanda’s monetary trajectory and broader economic resilience in 2026 and beyond.

Key Markets Likely to React to Interest Rate Decision

The interest rate decision in Rwanda typically influences currency markets, government bond yields, and regional equities. The Rwandan franc’s sensitivity to monetary policy makes it a key focus, alongside fixed income instruments. Additionally, regional stock indices and select commodities linked to Rwanda’s export profile may react to shifts in investor sentiment.

• RWFRWF – Directly tracks Rwandan franc movements, sensitive to interest rate changes.
• NRW – Rwanda-focused equity index, impacted by monetary and fiscal policy shifts.
• EAC – East African Community regional ETF, reflecting broader regional economic sentiment.
• USDRWF – USD-RWF currency pair, highly responsive to interest rate decisions.
• BTCUSD – Bitcoin, often a risk sentiment barometer, indirectly influenced by emerging market monetary policy.

FAQs

What is the significance of Rwanda’s interest rate decision?

The interest rate decision guides borrowing costs, inflation control, and economic growth, impacting financial markets and investor confidence.

How does the current rate compare historically?

The 6.75% rate is lower than the 7.50% peak in 2023 but slightly above the recent low of 6.50% in 2024, reflecting a cautious easing cycle.

What are the main risks facing Rwanda’s monetary policy?

Key risks include inflation volatility from commodity prices, fiscal deficits, and regional geopolitical instability affecting trade and investment.

Key takeaway: Rwanda’s steady interest rate at 6.75% balances growth support with inflation control amid external uncertainties, setting a cautious but stable monetary path forward.

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