Pressure on Franc continues

Foreign exchange inflows from delegates of the just-concluded African Union Summit in Kigali are unlikely to have a direct impact on the Dollar rate on the local Forex market. The development comes after the greenback was seen appreciating against the Franc despite inflows from the more than 3,000 delegates who attended the Summit. However, economists are optimistic of a turn for the better sooner. Prof. Thomas Kigabo, the chief economist at the National Bank of Rwanda (BNR), said it is still early to gauge the impact of these dollar inflows. “Comprehensive information about the forex market will be provided next week after our team has put the figures together,” he said. The central bank yesterday quoted the greenback at 781.8/797 (selling/buying) against the Franc compared to 775/791 at the closure of last month. However, commercial banks quoted it at an average of 802/810 yesterday, while forex bureaus were trading the Dollar at 810/813. Rwanda hosted a weeklong continent summit that closed on Monday, which brought together over 3,000 delegates from across Africa and beyond. Market-watchers say inflows from the event should have helped ease pressure on the local currency that has been shedding value over the past few months months. Valentine Uwanyirigira, from UAExchange, a forex in Kigali, said chances of the franc gaining ground are minimal “despite the fact that there were some more dollar inflows in the market during the AU Summit week because of high demand.” Uwanyirigira added that they were expecting Dollar supplies through commercial banks. Forex bureaus get their forex supplies, including dollars, through commercial banks. According to dealers, the central bank has increased frequency of its periodic interventions in the forex market, on the selling side to boost Dollar volumes, but this has not done much to reduce pressure mounting on the local currency. Since last year, BNR has been introducing measures to reduce impact ofdollar shortage on the forex market. However, the franc has maintained stability against regional currencies. The central bank quoted the Uganda Shilling at 0.23/0.237 for buying and selling, respectively, Kenya Shilling at 7.7/7.85, Tanzania Shilling at 0.357/0.364 and Burundian Franc at 0.471/0.481 yesterday. Meanwhile, the Euro was quoted at 861.7/878.9 to the Franc compared to 856.6/873.7 at the beginning of the month, while Pound Sterling was at 1,025/1,045, dropping from 1041/1062 at the beginning of the month, thanks to Brexit. editorial@newtimes.co.rw

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Pressure on Franc continues