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National Bank Rwanda: Ensuring Financial Stability

On a mission to become a world-class central bank, National Bank Rwanda (NBR) provides robust monetary tools to ensure Rwanda’s financial stability and sound financial systems are maintained with innovation, diversity, inclusiveness, and economic integration. Through a framework which fosters a culture of transparency, integrity, accountability, teamwork, and respect, NBR is focused on protecting and enhancing the economic performance of Rwanda and providing greater financial empowerment to people across the country.

NBR was founded in 1964 with the mandate to ensure the price stability of Rwanda and provide a sound financial system for the country. Today, this mission remains its central focus as it works to continuously build sustainable macroeconomic stability for Rwanda through monitoring the financial system’s performance. The financial system for NBR covers the banking, insurance, pensions, micro-finance institutions, and payment sectors. NBR carefully monitors these systems and is ready to adopt the appropriate policies and measures needed to protect the stability of the Rwandan economy.

NBR is governed by a Board of Directors which includes 2 executive members who are the governor and deputy governor, and then 7 non-executive members. The Board is responsible for providing the strategic direction of the Bank and ensuring that throughout its operations the central mandate of the company, to maintain price stability and a sound financial system for Rwanda, is achieved. Then through this strict management, NBR hopes to develop into a world-class bank making key moves towards vital financial development in both the local and international financial sector.

NBR was one of the original 17 regulatory institutions which was formed to implement national measures and commitments to ensure financial inclusion under the Maya Declaration founded at the 2011 Global Policy Forum held in Mexico. The Maya Declaration is a global initiative focused on delivering responsible and sustainable financial inclusion to reduce poverty and increase financial stability. Therefore, with NBR playing a key role at such a vital international conference, we can see that NBR is already a key player in the international market for financial stability, inclusion, and regulation.

A key part of NBR’s operations is the development of the Financial Stability Reports (FSR) which provides a detailed and synthesized report on the current state and changes to the financial system. The report provides a close analysis of the exogenous and endogenous risks that face the sector whether from local or international factors, and asses the current resilience of the sector to these risks. This close monitoring of the financial system of Rwanda allows NBR to ensure that it can overcome any shocks or provide measures to mitigate any potential constraints that it may face. NBR publishes this report annually and it is a vital document to understand how policy will be implemented going forward to ensure the stability and security of the financial sector.

A key part of the financial world is insurance, and NBR is in charge of assessing the financial sphere which covers the insurance and pension sectors to again ensure that it is continuing towards its overall goals to build a sound and stable financial sector. The insurance branch of NBR’s operations spans a legal and regulatory framework, which it utilises to work closely with insurance companies for the betterment of the financial economy. Across the insurance division, NBR follows the international standards laid out by governing bodies such as the International Association of Insurance Supervisors (IAIS) and the International Organisation of Pension Supervisors (IOPS). These standards have allowed Rwanda’s insurance industry to maintain a competitive edge in international markets and therefore bolster the economic reputation of NBR in the process.

To ensure that NBR is continuing to develop towards the benefit of Rwanda, the Bank holds a quarterly meeting to assess the current performance and state of the financial sector. The last meeting was held in February this year and shared the key findings from its 2023 FSR report. The report outlines that the financial sector for Rwanda across 2023 remained stable and experienced slight growth despite challenges faced by global tensions. The report outlines that the capital and liquidity buffers held by NBR remain strong and ensure the country can be resilient to shocks. The financial sector grew 20% in terms of assets, which is estimated at FRW 10,687 billion, compared to the previous year’s assets at FRW 8,909 billion. The report outlined that Rwanda’s financial sector was in a good and healthy position moving into the next year with many sectors, including the banking sector, making significant growth over 2023.

Overall, NBR is a vital operation that is working within both local and international markets to ensure that Rwanda’s financial sector remains stable and secure for future generations. With measures to ensure that people across Rwanda can access diverse and reliable financial services, especially those in the insurance sector, NBR is well on its way to being a world-class central Bank working tirelessly to maintain price stability and a sound financial system for Rwanda.