The Rwandan franc is trading at approximately 1,465 to the US dollar. A decade ago, it sat close to 850. That decline is not an accident or a policy failure.
National Bank of Rwanda Governor Soraya Hakuziyaremye has confirmed it is the structural consequence of a developing economy that imports far more than it exports and that the central bank’s job is to manage the pace of depreciation, not reverse its direction.
“If I need more dollars than I can actually generate, obviously my currency is going to depreciate. So its value will go down because I have to sort of sell more Rwandan francs for one dollar each time to be able to pay for my import. So that’s the structural issue we’ve been having.” She said during The Long Form Podcast appearance
Speaking on the Long Form Podcast, Rwanda’s NBR Governor Soraya Hakuziyaremye explained that Rwanda adopted a floating exchange regime at the start of 2000 specifically to retain independent monetary policy.
Under a pegged system like the CFA franc in West Africa, which is tied to the euro, a country’s monetary decisions must follow its peg partner regardless of local conditions. Rwanda chose differently.
“Our foreign exchange regime is a floating regime. We don’t have a fixed rate,” she said. “Market forces will decide the exchange rate of the Rwandan franc versus the dollar or any other currency. Why did we make that choice? Because what it allows you to do is to control your monetary policy.”
Rwanda’s import bill is structurally high. Industrialization, infrastructure investment, and capital goods purchases require sustained dollar outflows. Until export earnings from coffee, minerals, tourism, and non-traditional sectors grow enough to close the gap, the trade deficit will persist and the franc will continue facing depreciation pressure.
The NBR intervenes in the foreign exchange market not to prop up the franc but to suppress volatility. When speculative selling pushes the rate beyond what fundamentals justify, the central bank supplies dollars to stabilize it. It also publishes a daily official rate to anchor consumer and business expectations.
The franc has declined 4.07 percent over the past 12 months and has moved in a narrow band between 1,457 and 1,463 over the last month a sign that NBR intervention is containing short-term swings.
Longer term, the trajectory will depend on whether Rwanda can accelerate export growth to reduce the structural demand for foreign currency. Until that happens, the franc will keep losing ground, gradually and deliberately.
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