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Business Insider
24-06-2025
- Business
- Business Insider
Rwanda moves to ban illegal dollar trade as new currency law takes effect
Rwanda has introduced strict regulations to curb the unauthorized use of foreign currencies in local transactions, particularly the US dollar. Rwanda has implemented stringent regulations to prohibit unapproved local use of foreign currencies, particularly the US dollar. The National Bank of Rwanda (NBR) imposes fines of Rwf 5 million and Rwf 10 million for initial and repeated violations, respectively. The policy aims to strengthen the Rwandan Franc and ensure economic stability by combating informal dollarization. The National Bank of Rwanda (NBR) says it will impose significant penalties on businesses and individuals who quote prices, issue invoices, or conduct trade in US dollar and other foreign currencies without official approval. The crackdown on foreign currency use in Rwanda prohibits displaying prices in foreign currencies on websites, accepting foreign currency payments from local customers, and referencing foreign currency values during domestic sales negotiations. Businesses must use Rwandan Francs for local transactions. Exceptions include import and export transactions, as well as authorized foreign exchange transactions with special permission from the National Bank of Rwanda. According to the NBR, pricing goods or services in foreign currency without permission will attract a fine of Rwf 5 million for the first instance and Rwf 10 million for subsequent instances. Rwanda's currency law: Who's affected The regulation, announced by NBR Governor Soraya M. Hakuziyaremye applies to individuals and entities engaging in foreign currency pricing, transactions, or auctions without prior authorization. This includes businesses quoting prices in foreign currencies on websites, issuing invoices in foreign currencies to local customers, and referencing foreign currency values during sales negotiations. There are exemptions for payments linked to imports and exports, as well as transactions by specific businesses like hotels, casinos, duty-free shops, tourism agencies, and international schools, but only when dealing with non-residents. Long-term stability for African currencies According to the NBR, the crackdown is part of a broader effort to reinforce the use of the Rwandan franc in the national economy, stabilize monetary policy, and combat informal dollarization, which undermines the central bank's control over inflation and exchange rates. " The use of foreign currencies in the domestic market without authorization poses a risk to the economy. It reduces the effectiveness of our monetary tools and creates distortions in pricing and competitiveness," an NBR spokesperson said. The enforcement comes at a time when Rwanda is positioning itself as a financial and trade hub in the East African region. Apart from Rwanda, other African countries like Nigeria and Tanzania have also introduced legislation to curb the illegal use of foreign currencies in domestic transactions. Tanzania issued its laws in May, banning the use of foreign currencies for buying and selling goods and services within the country. The Bank of Tanzania (BoT) announced the measure, reiterating that all domestic transactions must be carried out in Tanzanian shillings. In Nigeria, the Senate introduced a bill last year seeking to prohibit the use of foreign currencies for payments and transactions within the country. The proposed legislation, aimed at ensuring that all payments—including salaries and business transactions—are conducted in naira, seeks to eliminate discriminatory practices and strengthen confidence in the local currency.
Zawya
25-03-2025
- Business
- Zawya
Rwandan franc battered by East African countries currency peers
The Rwandan franc (Rwf) has been battered by its East African peers as a result of sustained low production and a widening trade deficit. The National Bank of Rwanda (BNR) said in data released on Wednesday that the Rwf depreciated by 32.75 percent against the Kenyan shilling in 2024, in contrast to the 6.89 per cent appreciation recorded in 2023. The franc also depreciated by 12.85 percent against the Tanzanian shilling, following a 9.78 percent loss in 2023. The central bank data also showed that the franc weakened by 5.37 percent and 12.73 percent against the Burundian franc and the Ugandan shilling, respectively.'The Rwf's higher depreciation against the Kenyan shilling in 2024 was driven by increased foreign exchange inflows into Kenya, monetary policy adjustments, the Kenyan government's Eurobond buyback, and foreign exchange market reforms,' said the central bank statement. It said the Ugandan shilling strengthened against the franc due to higher inflows from coffee exports, rising foreign direct investment in oil and gas and increased tourism receipts. Uganda received about 1.5 million tourists in 2024, according to official data.'In nominal effective terms, the Rwandan franc depreciated against a weighted average of currencies from its main trading partners.''In 2024, it depreciated by 7.2 percent, an improvement from the 10.5 percent depreciation recorded in 2023. In terms of real effective value, the Rwf experienced a lower depreciation of 4.5 percent compared to the 10.3 percent observed in 2023.'This was primarily due to higher positive inflation differentials between domestic and foreign inflation observed in December 2024, it said. In 2024, the franc depreciated by 9.42 percent against the US dollar year-on-year, a significant slowdown from to the 18.05 percent depreciation recorded in 2023. Read: Rwanda central bank: This is why dollars are scarceThe franc also weakened against other major currencies, although at a slower pace, depreciating by 7.53 percent against the British pound and 2.83 percent against the euro, while appreciating by 1.03 percent against the Japanese yen. These exchange rate movements contrast sharply with those in 2023, when the franc weakened by 25.50 percent against the British pound, 22.50 percent against the euro, and 10.78 percent against the Japanese yen. Rwanda's trade with the East African Community (EAC) continued to expand in 2024, reflecting increased regional demand, but exports to the EAC grew by 8.2 percent to hit $276 million, up from $255 million in 2023. This growth was driven by higher exports of agricultural products and manufactured goods. Similarly, imports from the EAC increased significantly by 15.2 percent, reaching $998 million in 2024, compared to $866 million in the previous year. This rise was mainly driven by increased imports of food products, construction materials and manufactured goods, reflecting higher domestic demand and infrastructure development projects. As a result, Rwanda's trade deficit with the EAC widened further by 18.1 percent to $722 million from $611 million in 2023, according to the central bank. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
