High demand for dollars from importers has put a lot of pressure on the local unit over the past few weeks, leading it to shed almost Rwf3. Commercial banks and forex bureaus yesterday quoted the local unit at an average of 668/683 and 666.7/683.72, respectively. The National Bank of Rwanda quoted the franc at 659/671.68 compared to 663.6/669.9 last Wednesday.

Laurent Nkundimana, a dealer at C.T.V Forex Bureau, said commercial banks have in the past two weeks been selling to forex dealers low amounts of dollars despite the high demand for the greenback. 

Dieudonne Bakunda, a treasury dealer at I&M Bank Rwanda, said there was high demand from importers for dollars to buy goods for the festive season, but there is low supply.

"The central bank was (before the start of the decline) intervening once or twice a week with $900,000. However, last week they sold $650,000, which was little because the demand for the dollars is around $7m per week,” he explained. Bakunda added that because of low supply, dealers have been forced to buy dollars from ‘other sources’, pushing market rates high. Under normal situations, banks are supposed to sell to forex bureau operators about $50,000 per week.

As of September 27, the franc had depreciated by 3.9 per cent since December 2012. John Rwangombwa, the governor of the National Bank of Rwanda, said then that the pressure on the local unit would continue until the demand for dollars from importers reduces, as well as when more budget support flows in from donors. On July 21, the franc hit a nine-month record low, trading at an average of 655/660.