The Monetary Policy Committee of the National Bank of Rwanda (BNR) met on Tuesday and decided to maintain its unchanged Policy Interest Rate at 6% for the remaining of the second quarter 2011.
This interest rate, at which the central bank lends to other banks in the country, has decreased from 9% in November 2009 to 6% in November 2010 in order to support the gradual recovery of economic activities in Rwanda, following the economic crisis that hit at the end of 2008.
Francois Kanimba, the central bank’s governor, explains that interest rates have been made low by the BNR so as to give incentives to banks to invest more in business ventures, as well as facilitate credit for small and medium sized enterprises.
However, interest rates on bank loans remain very high, at around 16% and Kanimba doesn’t believe that the BNR’s policy will have the immediate effect of lowering these lending rates, although the rates are currently under revision.
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