Stability in Rwanda’s foreign exchange reserves has kept the Rwandan Franc stable against the other foreign currencies, Central Bank Governor Francois Kanimba has said.
The Governor said on Wednesday that the franc has managed to appreciate against the US Dollar partly because of the confidence built among foreign investors and Rwandans in Diaspora due to the country’s political stability.
Rwanda’s forex reserves hold 6.2 months of imports of goods and services and currently stand at about $740m, Kanimba said.
“The gross official foreign reserves have been comfortable which explains stable macroeconomic as it is recovering from a balance of payments crisis last year,” he explained.
Despite the negative effect of the global economic recession on the external sector, Rwanda managed to record a positive balance of payment of $57.05m by end of 2009, driven by foreign capital inflows.
Kanimba hailed the government for the efforts to mobilize resources through budget support that contributed significantly to act as a buffer against emergencies.
According to the recent monetary policy statement by BNR, the Rwandan Franc recovered its stability since July. From December 2008 to December last year, it depreciated by only 2.82 percent.
The statement indicates that the relatively stable exchange rate of the Franc against the US Dollar reflects the sufficient level of foreign assets in the banking system compared to the prevailing demand for forex.