Central bank says it is focusing on currency stability as a way of bolstering the country’s trade both exports and imports receipts.
The bank has been tussling with a declining Rwandan franc against the green back since the first quarter of 2015 and hit a high of Rwf 800 in the third quarter, triggering an increase in import value and declining export value.
“What we are doing as central bank is to make sure that the supply is at par with the demand, we avoid is making the franc too strong or too weak,” he told this website on Friday.
Kigabo notes that although the franc has been depreciating against the dollar but currently showing a slight appreciation, the currency continues to strengthen against regional currencies thus facilitating the country’s cross border trade.
This comes after importers asked for more tightening to allow the franc appreciation so that they buy goods at a fairly price.
Rwanda’s traders mainly import from China and Dubai while tops Kenya tops imports from the region.
As of May 27, Central Bank quoted the franc at Rwf 764 and Rwf 791 buying and selling respectively after a slight appreciation last week.
But government looks at Domestic Market Recapturing Strategy to boost use of local products in the market as well as promoting exports; the Bank says this ill ease the pressure on the demand for dollars.
The strategy launched in March runs under the flagship of made In Rwanda campaign recorded foreign exchange savings of 17.8 percent of the import bill with third of this from Cement since the strategy was launched.
“We working on changing the mindset of our people and to boost the value chain of production to sustain this campaign,” Francois Kanimba, Minister of trade and industry said.
The government is looking at producing most of the imported products locally to cut the import bill which normal puts preside on the currency.