Rwanda holds rate, no hit to economy, franc from Fed

      Rwanda's central bank left its benchmark repo rate at 5.0 percent and said the economic outlook remains positive and while the U.S. is expected to continue tightening its monetary policy "this however, will have no significant impact to the domestic economy or the FRW (the Rwandan franc).
      The National Bank of Rwanda (BNR), which has kept its rate steady since December 2017, added inflation remains low and stable and is projected to remain below the 5.0 percent target.
      Average headline inflation eased to 2.1 percent in August from 2.5 percent in the second quarter of this year while core inflation eased to 1.6 percent from 1.7 percent in the same period, BNR said.
      The Rwandan franc has been depreciating steadily against the U.S. dollar since mid-2015 and between December 2017 and August it fell 2.5 percent against the dollar as compared with declines of 1.8 percent and 8.0 percent during the same periods in 2017 and 2016, respectively.
      "Depreciation by end December 2018 is expected to be around 4.0 percent, which is lower than 4.5 percent initially projected," the BNR said.
      Today the franc was quoted at 877.4 to the dollar, down 3.9 percent this year.
      In the first 8 months of this year, Rwanda's export receipts rose 17.9 percent while formal imports grew 7.4 percent.
      BNR expects economic activity to continue to perform well in the second half of this year, with the composite index of economic activities (CIEA) signaling that the economy "is on track to achieve the initial annual growth projection of 7.2 percent in 2018," the central bank said.
      In the first half of this year the economy grew 8.7 percent on average, up from 2.9 percent in the same period of 2017. In the second quarter of this year, growth was 6.7 percent, up from 4.0 percent in the second quarter of 2017, BNR said.

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