The central bank on September 20 gave insights on how Rwanda's economy performed in the first six months of 2023, the results of monetary policy decisions taken, and an outlook on performance for the rest of the year.
Poor agriculture performance
For the first time, in six years, the insurance sector made an underwriting profit. It has been making profit mostly from investment, as clarified by John Rwangombwa, the central bank Governor. "The sector has stabilized and is on a good path, we expect to see more innovations, development, and efficiency in the way they deliver their services," Rwangombwa said.The central bank took note of commercial banks' willingness to lend, with new loans approved amounting to Rwf823 billion higher than Rwf586 billion approved during the first half of 2022. This represents an increase of 40.4 percent compared to the decline of 7.
When a bank increases its investments such as growing its loan book, it may borrow money from the central bank or another bank to support this growth. An increase in the repo rate is therefore expected to result in an increase in lending rates. As of now, Mutesi said, BPR recorded 18 percent increase in lending from June 2022 to June 2023, reflecting a year-on-year growth above the industry average of 5 percent, and that within the current economic context, some of the growth in loans can be explained by the impact of inflation on business.
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