UPDATE 2-Rwandan central bank lowers repo rate to stimulate lending

(Adds inflation forecast for Q1 2017)

KIGALI, Dec 28 (Reuters) - Rwanda’s central bank on Wednesday lowered its repo rate to 6.25 percent from 6.50 percent to help stimulate credit growth, Governor John Rwangombwa said.

Rwangombwa said while moderate pressure was expected on inflation and the local currency, authorities needed “to give a signal ... to the financial sector to continue supporting the financing of the economy.”

November’s year-on-year overall inflation declined to 6.4 percent from October’s 7.4 percent and the governor said the rate would likely stand at 6 percent for December.

In the first quarter of 2017, inflation was seen averaging 5.8 percent, compared to an average of 4.5 percent in the first three months of 2016, according to the governor.

Rwangombwa said credit to the private sector grew 7.4 percent in the first 11 months of this year, compared with 26.9 percent in the same period in 2015. (Writing by Elias Biryabarema; editing by George Obulutsa and Jason Neely)