Rwanda’s central bank paused its current monetary tightening cycle as it expects inflation to ease toward the target band by year-end.

The monetary policy committee held the key rate at 7.5% and intends to keep it there for the coming months to stabilize inflation over the medium term, “assuming nothing else unusual happens,” Governor John Rwangombwa said in the capital, Kigali on Thursday. The MPC has raised interest rates by a combined 300 basis points in its current tightening cycle that started in August 2022.

Annual urban inflation in Rwanda eased to 11.2% last month from 13.9% in September. It’s forecast to slow toward the central bank’s 2% to 8% target band by the end of this year and average around 6% in 2024, provided risks to the outlook don’t materialize, Rwangombwa said.

Risks include geopolitical tensions that pose uncertainties to world trade and weather-related shocks that would impact agricultural production, he said.

The east African nation, which earns most of its revenue from tourism and mining, tea and coffee exports, is also on track to reach its economic growth forecasts for this year, Rwangombwa said.