KIGALI, May 29 (Reuters) – Rwanda’s central bank cut its key interest rate RWREPO=ECI by 50 basis points to 7.0% on Wednesday, saying inflation was projected to remain within its target band at around 5% this year and next.

The rate cut followed two monetary policy meetings at which the Central Bank Rate was left unchanged.

In February, Governor John Rwangombwa said the bank could reduce the rate at upcoming meetings if inflation dynamics remained positive.

Annual inflation RWCPIY=ECI peaked at 21.7% in November 2022. It fell to 4.5% in April, well within policymakers’ 2%-8% target range.

Rwangombwa told a news conference on Wednesday that risks to the inflation outlook included global geopolitical tensions that could affect international commodity prices and adverse weather conditions in Africa.

He said the economy continued to expand in the first quarter, helped by a strong performance by the agriculture, services and industry sectors.

This month Finance Minister Uzziel Ndagijimana reiterated the government’s economic growth forecasts of 6.6% this year, 6.5% in 2025, 6.8% a year later and 7.2% in 2027. The economy expanded 8.2% in 2023.

(Reporting by Philbert Girinema; Writing by George Obulutsa; Editing by Alexander Winning and Emelia Sithole-Matarise)