Rwanda lifts its policy rate as inflation reaches 14.5 per cent
Rwanda's central bank raised its policy rate 50 basis points to 8.75 per cent after inflation reached 14.5 per cent. Iceland's August consumer prices rose 0.20 per cent monthly and 5.6 per cent annually. In Indonesia, a House commission approved Destry Damayanti as Bank Indonesia governor for 2026-2031; a plenary vote is still needed to make the appointment binding.
Economics & Markets··Night
Rwanda answers price pressure with a rate rise
The National Bank of Rwanda raised its policy rate 50 basis points from 8.25 per cent to 8.75 per cent at its 26 August meeting. July inflation remained above the bank's 2-8 per cent target range at 14.5 per cent, with core, fresh-food and energy prices informing the decision. Inflation had risen from 9.1 per cent in the first quarter of 2026 to 13.2 per cent in the second. The bank now forecasts an average of 13.1 per cent in 2026, down from 13.9 per cent previously, and 7.9 per cent in 2027, with a return to the target range in the second half of 2027. KT Press put cumulative rate increases since November 2025 at 175 basis points.[1]
Housing and education costs rise in Iceland
Iceland's consumer price index rose 0.20 per cent in August to 694.6 points, leaving annual inflation at 5.6 per cent. Excluding housing costs, the index fell 0.02 per cent from July but remained 5.2 per cent above a year earlier. Statistics Iceland said a 0.9 per cent increase in imputed rent for owner-occupied housing added 0.18 points to the monthly index. University registration fees rose 15.1 per cent and added 0.07 points, while a 9.6 per cent fall in international airfares subtracted 0.34 points. Housing and education costs therefore outweighed the downward contribution from cheaper flights in the headline reading.[2]
A plenary vote remains for Bank Indonesia
The Indonesian House's Commission XI approved Destry Damayanti as Bank Indonesia governor for 2026-2031. The Jakarta Post reported that a House plenary vote scheduled for the following Tuesday is still required before the appointment becomes binding. The commission also approved current deputy governor Aida S. Budiman as senior deputy governor and Solikin Juhro for the position Budiman would vacate. Destry is set to turn the acting arrangement that followed Perry Warjiyo's departure with two years left in his term into a full term of her own. While monetary boards contend with price pressure, Indonesia's decision leaves the composition of its leadership dependent on one unfinished legislative step.[3]
