Central bank must act to save the Franc

Editor, Reference is made to the article, "Landlords behind weakening franc" (Sunday Times, September 7). It clearly explains all those intimidating financial matters to the common man. It's from this article that I finally understood the term "inflation" and how the US dollar regulates economies around the world.
.
.

Editor,

Reference ismade to the article, “Landlords behind weakening franc” (Sunday Times, September 7). It clearly explains all those intimidating financial matters to the common man. It’s from this article that I finally understood the term “inflation” and how the US dollar regulates economies around the world.

If the landlords require to be paid in dollars while the employee gets his salary in francs, then the latter will keep on suffering and I’m afraid that there will be a time he will be with no alternative other than spending all his salary on rent.

I don’t know if injecting $300 million will alleviate the problem. Is this going to be the case every year? Where will BNR get the money provided that our exports (the main source of the dollar) were doing pretty worse during the last six months (as shown in the article)? What should people do to remain financially secure? What will happen once everyone wants their pay in US dollars? Will economy collapse because of that?

We need The New Times to keep educating us about financial literacy.

What started as greed for the dollar will very soon affect us all if the central bank doesn’t urgently do something about it. BNR shouldn’t merely say that something is illegal; they should move to stop it.

Didier Gatabazi

****************

The need for soft money inflow to support the national growth (40 per cent of budget), on which the country is dependent with the potential for it to disappear, fuels the rise in GDP and the greater demand of Rwanda to want to import more goods.

Importation requires USD, and thus businesses to import and real estate owners to demand USD which the government must supply to keep the exchange rate low.

Unfortunately, as this demand grows for all including building materials (for GDP) and consumer goods inflates the cost, in Rwanda for goods priced in francs. Again, those who want to buy are paid in francs except those working for international organisations.

This pushes those who can get USD into the upper class and those who can’t are pushed down due to lower purchasing power.

It seems that several respondents understand but don’t like this. It is uncertain that BNR can’t do anything except ask for legislation which creates a shadow economy or black-market for the US dollar.

The consequences are hard to imagine, it is problematic for the country.

Tom Abeles

 

Have Your SayLeave a comment