Rwanda holds rates at 6.5 pct, inflation seen in check

KIGALI (Reuters) – Rwanda’s central bank held its key repo rate at 6.5 percent on Thursday, Governor John Rwangombwa said, adding inflation had been low in the past two months and was not expected to exceed 3.5 percent by the end of 2015.

Rwanda’s urban year-on-year inflation rate fell to 0.7 percent in February from 1.4 percent the previous month, which the statistics bureau had said was due to a drop in transport costs.

“Despite the positive developments to date, pressures to the inflation outlook may come from uncertainties in the international commodity prices, food prices and exchange rate. However, these risks are not expect to drive inflation on the extreme upside,” the governor said in a statement.

The economy grew 7 percent in 2014, up from 4.7 percent a year earlier, and the governor said that “the accommodative monetary policy is expected to continue supporting the financing of the economy through the banking sector.”