For the first time, Rwanda has added the Japanese yen to its external debt portfolio, broadening the currency mix of its borrowing. The government secured ¥15 billion (about Rwf138.9 billion) on August 25, as part of a dual-currency commercial loan that also includes €82 million (about Rwf140.8 billion). ALSO READ: Rwanda secures Rwf139bn in first-ever yen financing The transaction, which closed on August 25, has a 15-year maturity and a six-year grace period and is backed by the World Bank Group through a Policy-Based Guarantee. According to the Ministry of Finance and Economic Planning (MINECOFIN), the addition of the yen should not be interpreted as a shift away from the currencies that have traditionally dominated Rwanda’s external debt. “Rwanda's external debt portfolio remains predominantly denominated in Special Drawing Rights (SDR), US dollar and euro,” the ministry said in a statement to The New Times. According to the ministry, at the end of 2025, SDRs, the US dollar and the euro accounted for 32.4 per cent, 29.6 per cent and 22.1 per cent respectively, of Rwanda’s public debt. “The addition of a yen tranche, now at 5.3 per cent, reflects a continuation of our diversified funding strategy rather than a departure from it, broadening the currency base within a framework that has been in place for some time.” ALSO READ: Rwanda ranks among Africa's top performers in debt transparency Why the yen? The ministry said the decision to include the yen was guided by the Medium-Term Debt Strategy, which prioritises sustainably sourced, low-cost financing. It said the dual-tranche euro/yen structure was assessed as offering a more favourable blended cost than a single-currency alternative, in line with that objective. “Currency selection is one of several factors, alongside cost, tenor and market access that inform how individual transactions are structured.” Managing currency risk As of end-June 2026, foreign-currency-denominated debt accounted for 84.8 per cent of public debt, down marginally from 84.9 per cent a year earlier, according to the Public Debt Management Strategy FY2026/2027–2028/2029. ALSO READ: Why Rwanda's investor relations, debt transparency matter The ministry said currency risk is assessed across the overall debt portfolio rather than on an individual transaction basis and is monitored continuously under the Medium-Term Debt Strategy. “The objective is to keep the overall exposure profile balanced and within prudent thresholds.” The ministry said the yen financing was evaluated against this broader risk framework before it was contracted. Could it open the door to Japanese investors? The ministry said the yen-denominated tranche marked Rwanda’s entry into a new source of international capital and was expected to expand the country’s access to Japanese and other Asian investors. “This facility follows the World Bank-guaranteed EUR transaction secured in April 2026 and reflects Rwanda's broadening access to a wider set of funding instruments and investor bases, on favourable and prudently managed terms,” the ministry said. However, the ministry cautioned that any future financing instrument, including capital markets options, would be considered on its own merits, in line with its cost and risk objectives.
