Local units boosted as EAC awaits single currency

As the region waits for the launch of East Africa’s single currency in 2024, there are on-going efforts to increase availability of national currencies to business people going about their trade in member countries.
L-R: Finance minister Claver Gatete, EAC minister Jacqueline Muhongayire and John Rwangombwa. Business Times/ File.
L-R: Finance minister Claver Gatete, EAC minister Jacqueline Muhongayire and John Rwangombwa. Business Times/ File.

As the region waits for the launch of East Africa’s single currency in 2024, there are on-going efforts to increase availability of national currencies to business people going about their trade in member countries.

Under the East African Payment System EAPS, central banks of partner states are expected to avail national currencies, including Rwanda Francs, to cross-border businesses to help them avoid losses resulting from conversion from one currency to another.

Rwanda central bank Governor, John Rwangombwa, says the initiative will help reduce the cost of doing business across borders as well as financial transaction costs.

“We want to create a harmonised mechanism that will make it easy for our people to transact business with greater flexibility as the community awaits the single currency [to come in 10 years] from now. Before this can happen, we want to ensure that central banks recognise and avail local currency to the business community.”

The system will make it easy for anybody to walk into any commercial bank in the region, shopping mall or market across the border and transact business in Rwanda Francs.

“We want to ensure that central banks accept and avail local currencies to people so as to be able to do business with great ease,” Rwangombwa said.

Recently, Jacqueline Muhongayire, the minister for East African Affairs, told The New Times that the bloc is looking for ways of harmonising financial payments across the region even before the region adopts a single currency.

Kenya, Tanzania and Uganda last week launched an integrated real-time cross-border payments system designed to ease cross-border business and bolster intra-regional trade. The system links the real-time payment systems of the three countries. The other EAC partner states Rwanda and Burundi are expected to join as soon as they are ready.

The system is expected to ease money transfers within the region, where regional trade volumes are growing.

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