Business
Rwanda’s Central Bank Governor Says its Economy has Reached a Turning Point
The Rwandan franc is weakening. What is happening? To what extent are you concerned about this depreciation?
This is expected. It is partly linked to the delayed aid disbursements in 2012. But even without that, we expect this trend to continue as we try to build our exports. The biggest challenge is that our export base has not been growing fast enough to catch up with imports. We have had double-digit growth in our exports – almost over 20% this year – but the import bill is still quite high.
We have high demand for foreign exchange because our economy is growing and most of the materials and goods used to grow this economy are imported. This exerts pressure on the exchange rate.
But as we increase our exports, the depreciation itself is a catalyst to increase the competition of our export sector. Our biggest worry about depreciation is how this translates into inflation. But if it is still at levels where it is not translating into inflation, it is not worrisome.
Copyright The Africa Report 2014
