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.


Rwanda’s Weekly Agro Exports Performance



Last week Rwanda shipped out various tonnes of horticultural products coffee and tea fetching an impressive amount of foreign revenue.

According to National Agricultural Export Development Board (NAEB) mandated to develop and enhance Rwanda’s agricultural exports, Last week Rwanda exported 255,298Kg of horticultural products which earned U$441,679.

Details show the Main Countries of destination of Rwanda’s horticultural products were mainly Holland, United Kingdom, DRC, Germany, among others including USA, UAE, France, Uganda, Belgium, Tanzania and Denmark.

A total of 431,107Kg of Rwanda Coffee worth U$1,383,622 was exported compared to previous week, export quantities and revenues increased by 86.2% and 83.9% respectively. 52.2% of the consignment was fully washed. Destinations: China, UK, Belgium, Russia, Kenya, South Sudan & Nigeria.

Meanwhile, 449,000Kg of Rwanda Tea  were exported generating U$1,146,118. Compared to last week, the average price slightly reduced from U$2.78/Kg to U$2.5/Kg. Main country buyers were Pakistan, and UK among others.

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Tanzania Unveils Aggressive Plan For Livestock



Tanzania has announced that it is seeking to revamp its livestock subsector with the aim of making it more profitable.

Dr. Jonas Kizima the Acting Director-General of Tanzania Livestock Research Institute (Taliri) said on Tuesday that Preliminary studies have discovered that most industries in the livestock products category are performing shoddily due to poor production and supply of raw materials.

The Tanzanian government said it is embarking on implementing a special five-year programme (2021-2025) to push for improvement of the livestock industry.

“The programme seeks to enable stakeholders in the beef and dairy cattle chains in all regions of to improve their performance by adopting better technologies and practices so that they can stand a professional chance to meet actual raw material demand in the livestock industry,” Dr. Jonas Kizima said.

Tanzania is therefore arguing that it is going to introduce and help livestock keepers across the country to raise hybrid animals, provide best animal health services, animal compounded and feeds, put in place animal husbandry infrastructure, improve milk handling, grazing systems and maintain good diary animal genetics.

“Inbreeding is the biggest technical challenge livestock keepers are facing- it is detrimental to livestock,” Dr Kizima noted.

The new agenda is in compliance with President John Magufuli’s directive issued to revive and promote animal industries for the next five years in the coastal East African country.

According to Concerns by Magufuli at least 90% of animal skins and skins produced in Tanzania were of very poor quality due to poor slaughtering methods.

Magufuli says he is seeking to motivate investors from within and outside the country to invest in meat industries, but also in leather production and other animal products such as hoofs.

Under this new program, Tanzania wants to construct seven major abattoirs in different regions with the capacity to slaughter at least 6700 cows and 11000 goats per day.

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Global Oil Prices Fall Ahead of OPEC Meeting



As the alliance of Oil producing countries under OPEC meet on Thursday, global oil prices have reportedly fallen according to sector experts.

Details indicate that the alliance is expected to loosen the taps after prices got off to their best ever start to a year.

But it’s unclear how robustly the group will act, with the Saudi Arabian energy minister calling for producers to remain “extremely cautious.”

The market continues to face risks in the near term. China’s Unipec was re-offering cargoes of April Angolan crude amid weaker sales.

Diesel demand in India was also down versus a year earlier amid record pump prices in the country. Both point to a limit on some of the recent firmness seen within the oil market.

“Now that oil’s back at $60, there’s going to be a push to wean off of those cuts,” said Stewart Glickman, energy equity analyst at CFRA Research.

“The question is how much are they going to bring back. The biggest risk is if supply presumes we’re back to pre-pandemic demand in 2021 and that turns out not to be the case.”

Still, there has been a raft of bullish calls in recent weeks predicting the rally will continue as the producer response trails consumption, while maintenance in North Sea fields is set to further reduce supply.

There are also some signs that demand is starting to pick up. U.S. gasoline demand jumped by 1 million barrels a day last week to 8.76 million barrels a day, a level comparable to March 2020 before the pandemic, according to Descartes Labs.

“People have become very optimistic about the ability of OPEC+ to manage a return to a balanced market,” said Michael Lynch, president of Strategic Energy & Economic Research.

The market continues to “see improved demand down the road and OPEC+ not oversupplying the market as they ramp up again.”

The Organization of Petroleum Exporting Countries and its allies must decide how much output gets restored — and at what pace — with current reductions amounting to just over 7 million barrels a day, or 7% of global supply.

The 23-nation coalition will choose whether to revive a 500,000-barrel tranche in April, and in addition, whether the Saudis confirm an extra 1 million barrels they’ve taken offline will return as scheduled.

Citigroup Inc. thinks the coalition will boost output by about 500,000 barrels a day next month, with Saudi Arabia unlikely to continue its voluntary curbs.

“A higher oil-price environment, an increasingly promising demand picture by summer, and the recovering but still growing U.S. oil production outlook for 2021 should give OPEC+ the confidence to slightly increase supply,” said Louise Dickson, an analyst at consultant Rystad Energy AS.

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