The Rwandan franc continued to face sustained pressure in November, raising concerns among foreign exchange dealers about the local currency.
Dealers were quoting the franc at 854 buying and 860 selling on Wednesday, a unit down from trading on Tuesday. They blame the fall on a mismatch between imports and exports.
The National Bank of Rwanda (BNR) was quoting the greenback at Rwf834 buying and Rwf851 selling on Wednesday. In October, the dollar was buying at Rwf832 and selling at Rwf848.
“There is a scarcity of the dollar in the market and we suspect that some traders are hoarding dollars, which is making it difficult for the franc to gain value,” said Sreejith Damodaran, the head of operations at UAE Exchange Rwanda.
Officials from the Rwanda Stock Exchange said the value of the franc had not had an adverse effect on trading at the bourse because any depreciation had been compensated for by an overall positive business environment.
“The franc has depreciated mainly due to external factors and also because import more than we export,” said Celestin Rwabukumba, the CEO of the Rwanda Stock Exchange.
He added that the status of the franc was not a major concern to investors at this time because the exchange rate is not yet volatile. The macro economy is also in a stable state.
Public transport fares, which have been stable for the past two years are set to be revised by the Rwanda Utilities Regulatory Authority, partly due to the depreciating franc.
In the region, the Kenyan shilling reversed a losing streak against the dollar as offshore investors returned to the market following the Supreme Court’s dismissal of petitions against President Uhuru Kenyatta’s win.
The Ugandan shilling was also said to be stable due to low dollar demand from importers and commercial banks. However, commercial banks forecast that the shilling will weaken during the festive period.
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