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Rwandan Franc Faces Turbulence

by Daniel Sabiiti
12:15 pm

The Kenya shilling and US dollar have managed to make a major shift in the selling and buying rates against the franc compared to the last month which remained steady.

The Ksh shifted its selling power to Rwf8.5 compared to Rwf8.4 as of February 9th while the dollar twisted the buying power to purchase at Rwf840 compared to Rwf839 in the same periods last week.

However the euro made very slight and insignificant changes on the buying counters compared to selling as the Ugandan shilling saw very little change compared to last week.

Forex turbulences come at a time when global markets are falling and Rwanda plans to shock absorb the exchange rates against the dollar to be in position to cut on its trade deficits in the next 2018 budget proposal.

While addressing the parliament last week, Claver Gatete, the Minister of Finance and Economic Planning said that there was a 2.7 percent drop in last year’s export- import gap and the next budget will focus on made in Rwanda products to further cut this deficit.

To absorb shock any drops in forex bargaining power as seen in 2016, the ministry also said government expects a net increase in domestic revenues of Rwf669.4 billion, which is Rwf6.5 billion higher than the projection of Rwf 662.9 billion in the original budget.

The increase comes from the sale of treasury bills and bonds as well as a drawdown from strategic fuel reserves. External grants disbursements were on track registering an amount of Rwf168.3 billion against Rwf168.8 billion projected for the period.

However, government has set dates for selling its 5 year treasury bonds amounting to Rwf15 billion, which starts this February 19 with books opening and February 27 as listing of the bonds on the stocks, for grabs.

On the other hand, both Rwanda stock and all shares indices went down 1.08 and 0.15 point then closed at 131.05 and 132.86 respectively, with the Bank of Kigali getting the hardest hit of minus five francs on its shares as the BK counter closed at Rwf290(Rwf295 previous).