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National Bank Of Rwanda Maintains Central Bank Rate (CBR) At 4.5%




The statutory quarterly Monetary Policy Committee (MPC) meeting held on 18th February
2021 reviewed the outcome of its previous decisions, and assessed the recent economic
developments and the outlook at the global and national level.

Considering that inflation is projected to evolve below the medium-term benchmark of 5 percent in 2021, and acknowledging the need to support the economic recovery, the MPC decided to maintain an
accommodative monetary policy stance by keeping the CBR at 4.5 percent to continue supporting the financing of the economy by banks.

The Global economy projected to recover from the contraction:

According to estimates published by IMF in January 2021, the global economy contracted by
3.5 percent in 2020, owing to negative impact of COVID-19. In 2021, the global economy is
projected to recover and grow by 5.5 percent. However, the strength of the recovery is
expected to be uneven and unequal across countries depending on factors like; access to the
COVID-19 vaccine, the effectiveness of policy support, exposure to cross-country spillovers,
and preexisting economic conditions.

The Domestic economy expected to recover from the negative impact of COVID-19:

Rwanda’s real GDP contracted by 4.1 percent in the first three quarters of 2020 compared to
an growth of 8.3 percent registered in the corresponding period of 2019. However, the second
half of 2020 recorded a gradual recovery, on the back of supportive policy measures and
easing COVID-19 containment measures.

This recovery is evidenced by the rising trend of the real Composite Index of Economic Activities (CIEA), which increased by 9.4 percent in the second half of 2020 from a contraction of 2.1 percent recorded in the first half of 2020. This domestic economic recovery is expected to continue in 2021, supported by policy interventions to revive business activities, despite the uncertainty around COVID-19 and its
containment measures. The roll-out of the COVID-19 vaccine globally and in the country will
also enhance private-sector optimism, hence stimulating the recovery in economic activities.

CBR transmission to market rates continues to improve:

The continuing NBR accommodative monetary policy stance has contributed to a further
reduction in market interest rates. Money market rates were steered around the central bank
rate, in the symmetric corridor of +1 percent, with the interbank rate dropping by 11 basis
points to 5.35 percent in 2020.

During the same period, the average lending rate reduced by 14 basis points to 16.35 percent,
which is favorable to continue supporting the economic recovery.

Monetary aggregates remained resilient to the impact of COVID-19:

The monetary sector remained resilient in 2020, owing to supportive policy measures, amid
subdued demand for loans by the private sector during the lockdown. Broad money (M3)
grew by 18.0 percent in 2020 compared to 15.4 percent recorded in 2019, supported by the
increase in the outstanding Credit to the Private Sector (CPS), which grew by 21.8 percent
from 12.6 percent the previous year. The expansion in CPS was essentially driven by the
restructuring of loans granted to borrowers whose activities have been negatively affected
by the pandemic, and new authorized credit disbursed in 2020.

Foreign exchange market remains stable:

As of December 2020, the FRW had depreciated by 5.4 percent y-o-y against the USD, from
a depreciation of 4.9 percent in December 2019. Pressures on the Rwandan franc came
during the second half of the year, following the resumption of economic activities and the
increase in the demand for foreign currencies amid lower foreign inflows. However, the
foreign exchange market is expected to remain stable, with adequate foreign exchange
reserves held by NBR covering 5.9 months of imports as of December 2020.

Headline inflation projected to remain low in 2021:

As initially projected, headline inflation dropped to 5.0 percent in 202004 from 9.0 percent
recorded in 202003. This decline reflects a significant drop in core inflation, following the
downward revision of public transport fares in October 2020, and a deceleration in prices of
fresh food products reflecting favorable agricultural production in season A/2021.

In 2021, headline inflation is projected to evolve around the lower bound of 2.0 percent owing to
subdued inflationary pressures. Risks that may divert the headline inflation from the
projected baseline path include the performance of agriculture in seasons B and C 2021.

The MPC will continue to closely monitor domestic and global economic conditions and
stands ready to take appropriate measures if and when necessary.

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Most Expensive Home in America To Be Auctioned



The One mansion of the largest private homes ever built, with a colossal 105,00sq ft of living space will go to the highest bidder tonight during a public auction.

Once valued at $500 million, The One mansion in Bel-Air is being sold for $295 million and will be on the open market until it is auctioned off by Concierge Auctions, an online auction marketplace, from February 28 to March 3.

The home will be sold without reserve, meaning it will sell to the highest bidder. Even if it sells close to the price it’s listed at, it will surely break records.

Currently, billionaire and hedge fund tycoon Ken Griffin’s $238 million New York penthouse in 2019 holds the record as the most expensive U.S. home ever sold.

Developed by Nile Niami, the massive estate took more than 10 years to build and created massive debt for Niami. His development company, Crestlloyd, filed for bankruptcy last year, forcing the home to careen towards auction as part of the bankruptcy proceedings.

However, the home still has about 12 more months of work. The buyer will have to put down nearly $340,000 as a deposit.

The Los Angeles home is one of the largest ever built, and is twice the size of the White House. It spans 105,000 square feet and the property sprawls over 3.8 acres.

Outdoor features include a moat of water on three sides of the home, five pools, a 10,000-square-foot deck and a 400-foot outdoor running track.

The home is more like a personal, private resort than a single-family home. There are a whopping 21 bedrooms, 42 full bathrooms and seven half bathrooms.

Despite its grandiose nature, there is a pared-down, neutral color palette throughout and calming water features.

Within the home, there are custom-curated artworks from artists Mike Fields, Stephen Wilson and glass artist Simoe Cenedese, to name a few. Soaring, 26-foot ceilings make the home feel even larger than it is (if that’s possible), and rooms are oversized and expansive.

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Rwanda-Uganda Full Trading Resumes



Full trading between Rwanda and Uganda is scheduled to resume on Monday January 31st following Kigali announcement that it had opened locks on its borders shut in March 2019.

“Rwanda has taken note that there is a process to solve issues raised by Rwanda, as well as commitments made by the government of Uganda to address remaining obstacles,” Kigali said in the statement.

Since the border closure Rwanda and Uganda recorded a significant reduction in trade flows and was further worsened by the covid-19 pandemic that struck a year after Rwanda had slammed its doors to the northern neighbour.

Before the border was closed in 2019, Uganda export revenues fetched from trading with Rwanda were valued over U$600million. During 2020 Uganda Exports to Rwanda was US$2.31 Million, according to the United Nations COMTRADE database on international trade.

President Paul Kagame said in his new year address that Rwanda prospered in the economic front.

“We are beginning the year 2020 after a successful 2019.Our country remained safe as a result of our efforts”.

The Africa Development Bank in its 2019 outlook on Rwanda, projected robust growth prospects even as the standoff with Uganda heightened.

For example, Rwanda and Tanzania signed the standard gauge railway (SGR) deal dubbed, sub-Saharan Africa’s first 570 Km bullet line with Tanzania worth US$2.5 billion.

Also Rwanda by December 2019 signed a U$1.3 billion deal on Bugesera Airport with Qatar.

One of the biggest blows that Uganda suffered in its standoff with Rwanda was the emergence of Tanzania as Rwanda’s new major trading partner.

Uganda exports to Rwanda include; mineral fuels, oils, distillation products ,plastics ,textiles ,cereals , electronics, vehicles, machinery, fish, edible fruits, soaps, cement, lubricants, waxes, candles and an assortment of manufactured articles.

With the border slated for opening on Monday, the gesture is expected to boost  the movement of goods, transport, persons and services and under strict observation of restrictions against covid-19 pandemic.

How Museveni Lost to Kagame in Race For Regional Dominance

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Akabanga Tycoon Diversifies to Petroleum



Sina Gerard famed for producing the hot oiled pepper ‘akabanga’ has diversified into petroleum products, Taarifa Business desk reports.

Under a new company registered as Sina Gerard Petroleum Ltd, the tycoon’s decision indicates that he is reading from a good business book on diversification strategy.

Diversification is a business development strategy in which a company develops new products and services, or enters new markets, beyond its existing ones.  Companies diversify to achieve greater profitability.

Diversification will never be an easy game, and managers must study their cards carefully. It takes smart players to know when it’s best to raise their bets and when it’s best to fold.

Havard Business review research suggests that if managers consider the following six questions, they can push their thinking still further to reduce the gamble of diversification. Answering the questions will not lead to an easy go-no-go decision, but the exercise can help managers assess the likelihood of success.

The issues the questions raise, and the discussion they provoke, are meant to be coupled with the detailed financial analysis typical of the diversification decision-making process.

Together, these tools can turn a complex and often pressured decision into a more structured and well-reasoned one.

Thus, when managers consider whether or not to diversify, they should ask themselves the following questions:

What can our company do better than any of its competitors in its current market?

Before diversifying, managers must think not about what their company does but about what it does better than its competitors.

What strategic assets do we need in order to succeed in the new market?

To diversify, a company must have all the necessary strategic assets, not just some of them.

Can we catch up to or leapfrog competitors at their own game?

Will diversification break up strategic assets that need to be kept together?

Managers need to ask whether their strategic assets are transportable to the industry they have targeted.

Will we be simply a player in the new market or will we emerge a winner?

What can our company learn by diversifying, and are we sufficiently organized to learn it?

Like good chess players, forward-thinking managers will think two or three moves ahead.

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