Rwanda's Central Bank Voes to Contain Inflation Below 5%, Reports KT Press

    KIGALI, RWANDA, February 24, 2015 /24-7PressRelease/ -- Rwanda's Central Bank expects no increase in inflationary rate above 5% this year, as oil and food prices continue to decline.

"Inflation will not increase above 5%, as per medium-term forecast," Thomas Kigabo, the Bank's chief economist told KT Press. "We are sure of this as the global oil prices continue to decline."

The current inflation rate remains at 6.8%.

However, John Rwangombwa, the Central Bank Governor, said apart from a decline in oil and food prices, he is embarking on other measures to contain inflation, especially by pushing for a 'cashless economy'.

Rwangombwa said that, "We are making sure that the number of people using electronic cards increases." This, he said, reduces money in circulation.

Meanwhile, prices for agricultural products are expected to decline after they dropped by 3.4% last year, due to an increase in supply.

Prices are expected to continue to decline in 2015 for most of commodities as long as the gap between supply and demand is expected to drop.

Rwangombwa said despite Rwanda's strong economic outlook and a controlled inflation rate, inflation for sub-Saharan Africa is expected to grow by 7% by the end of 2015.

In East Africa, since 2013, headline inflation remained moderate at 2.9% by December, on the back of good performances in agriculture sector despite some seasonal shocks.

Food prices also declined across the region due to good harvests.

Domestically, Rwanda's inflation remained considerably low, at 1.9% in 2014 on average, compared to 4.6 % in 2013. "This is mainly due to falling in international food and oil prices as well as easing inflationary pressures in the EAC member states," Kigabo said.

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