Rwandan importers are feeling the pinch of a stronger dollar against the franc.

The exchange rate has been under pressure resulting from a rapidly increasing demand for forex to finance imports and an appreciating dollar globally.

Specifically, the Rwandan franc has continued to depreciate in recent months, dropping to as low as Rwf770, which analysts say could potentially make it difficult to finance the country’s growing import bill if the trend persists.

The trade deficit is expected to persist in the short to medium term as high demand for both intermediate and capital goods as well as lubricants continues to outstrip the gradually expanding but still narrow export base.

Yet, with depreciating franc, importers are finding it expensive to import goods because they purchase in dollars.

Emmy Uwintije, an importer of male clothes from Uganda and operates her business in central business district, said she now buys her merchandise from Kigali, which has reduced her profits compared with importing from Kampala.

“When the dollar went above Rwf700, I stopped buying my merchandise from Kampala because the dollar was becoming expensive for my operations,” said Mrs Uwintije.

According to economists, the depreciation of the Rwandan franc will in the long term hurt the import bill and ultimately the economy.