IMF official hails Rwanda on inflation control as central bank marks 60th anniversary
An official of the International Monetary Fund (IMF) hailed Rwanda Friday for effective control of inflation and safeguarding its currency value through sound macro policies.
Aemro Sellasie, the director, African Department at IMF was speaking during the marking of the 60th anniversary of the National Bank of Rwanda in the capital Kigali.
“Rwanda has achieved remarkable success in controlling inflation and safeguarding its currency value through sound macro policies, including an interest-based monetary policy approach. This has ensured price stability and competitiveness,” he said.
Sellasie noted that since its inception in 1964, the central bank has transformed from direct control measures to embrace more market-based policies.
He said by championing transparency, capacity building, and market development, the central bank “paved the way for its current forward-looking interest rate-based monetary policy.”
John Rwangombwa, governor of the National Bank of Rwanda said the as the country’s financial sector developed, the bank transitioned to a forward-looking, price-based monetary policy in 2019 to better achieve inflation goals.
Rwanda's economic performance remained strong, maintaining an average inflation of 5.9% from 2006-2020, said Rwangombwa.
Sellasie meanwhile urged Africa’s central banks to embrace digital transformations which he said can foster inclusion and payment efficiency.
He also urged central banks to understand the potential risks associated with new instruments such as central bank digital currencies, particularly their impact on bank intermediation, monetary policy transmission mechanism, risk of currency substitution, and capital flow management risks.
He underscored the importance of keeping central banks free from political interference.
“It would be critically important to keep central banks free from political strings as much as possible. With a blend of practical wisdom, an open mind to global insights, and unwavering independence. I have no doubts that central banks in Africa will help usher and make this the Africa century,” he said.
At the event, Prime Minister Edouard Ngirente called on the country’s central bank and other financial institutions to strengthen their regulatory tools against emerging risks including cybercrimes and money laundering.
The premier said the central bank has played crucial role in Rwanda’s journey to achieve a sustained and broad-based economic growth leading the GDP per capita to rise slightly above eight times over the last 30 years.
