EDITORIAL: A stable Franc benefits us all

The National Bank of Rwanda has been compelled to take a strong stance in an effort to arrest recent gyrations by the Rwanda Franc that has seen the national currency lose ground on the US Dollar. The central bank blames the situation on market speculators, saying some unscrupulous money traders have succeeded to create an artificial exchange rate. The central bank says currency exchange bureaus are quoting the cost of the US Dollar at Rwf750, but selling it at Rwf800. Although the money traders are just doing business driven by desire for profits, what they are doing is unscrupulous, illegal and to the detriment of both the public good and the economy. The strength of a currency, in economic terms, implies the price (or the exchange rate) of one currency in terms of another foreign currency; this is usually measured with respect to the US Dollar, which is considered as the world’s reserve currency. While the impact of a currency’s turbulence on an economy is far-reaching, many a local will not pay attention to exchange rates because most of their transactions are conducted in Rwanda Franc. For the typical consumer, exchange rates only come into focus for occasional activities or transactions such as foreign travel, import payments or overseas remittances. Sadly, there are many people travelling and many more engaged in remittances across the borders. With speculators literally arresting the currency market, the tide is bound to roughen as more people get fidgety as more people horde the Dollar. Traders do it for selfish interests, while individuals hope to cash in on a day when the rate would favour their activities. The central bank projection was that the Franc’s depreciation to the Dollar would not exceed 5 per cent for the whole year and that projection was reportedly on course until the start of July when the depreciation shot above 6 per cent, causing stampede on the market. It is as well that the central bank is not leaving anything to chance. The weeks of profiteering has to stop. Let’s make our economy serve the public good.

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EDITORIAL: A stable Franc benefits us all