Rwanda: BNR to stop bank stimulus

Feb 14, 2011

The National Bank of Rwanda (BNR) is planning to withdraw the stimulus package it provides to banks this year, central Bank Governor Francois Kanimba told the Business Times.

It set up a fund in 2009 to help banks lending to business in a bid to stimulate economic growth during the financial crisis.

However, according to a recent report by the International Monetary Fund, commercial banks' lending rates have remained high, preventing many businesses from accessing credit.

"Looking at the level of liquidity in the banking system, I do not think we still need to keep such parallel stimulus that we introduced in 2009; even when you look at how the banks are using this facility, the need has gone down drastically because they now have enough liquidity in their operations," Mr Kanimba said on Tuesday.

The Governor could, however, not say when the stimulus is likely to be switched off, commented The New Times.

Mr Kanimba also announced that the BNR will introduce a new system to authorise instant money transfers from one bank to another.

This system is common to five other central banks in countries members of the East African Community.