Rwanda’s central bank has cut the lending rate to 4.5% from 5% in an effort to mitigate economic shocks of COVID19. Further, the bank lowered the cash reserve requirements to stimulate lending to businesses.
Speaking to Bloomberg, Rwanda’s Central bank governor said that in 2020 inflation will average 6% which is slower than the 8.2% expected in Q2. Moreover, the governor revealed that the reduction in CRR availed 23.4 billion francs at the beginning of April.
He added that lenders have access to an additional, 50 billion francs credit facility at the central bank rate. By April 10, banks had restructured loans worth 255 billion francs.
President Kagame on Monday called for the delay in some debt repayment for about two years to conserve cash. In this case, the government is seeking debt relief from multilateral and bilateral institutions with IMF earmarking Rwanda as one of the beneficiaries in an $11 billion plan. The Rwandan government predicts that economic growth will slow to 3.5% in 2020 from earlier forecasts of above 10%.
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