The Rwandan franc (Rwf) has been battered by its East African peers as a result of sustained low production and a widening trade deficit.

The National Bank of Rwanda (BNR) said in data released on Wednesday that the Rwf depreciated by 32.75 percent against the Kenyan shilling in 2024, in contrast to the 6.89 per cent appreciation recorded in 2023.

The franc also depreciated by 12.85 percent against the Tanzanian shilling, following a 9.78 percent loss in 2023. The central bank data also showed that the franc weakened by 5.37 percent and 12.73 percent against the Burundian franc and the Ugandan shilling, respectively.“The Rwf’s higher depreciation against the Kenyan shilling in 2024 was driven by increased foreign exchange inflows into Kenya, monetary policy adjustments, the Kenyan government’s Eurobond buyback, and foreign exchange market reforms,” said the central bank statement.

It said the Ugandan shilling strengthened against the franc due to higher inflows from coffee exports, rising foreign direct investment in oil and gas and increased tourism receipts. Uganda received about 1.5 million tourists in 2024, according to official data.“In nominal effective terms, the Rwandan franc depreciated against a weighted average of currencies from its main trading partners.”“In 2024, it depreciated by 7.2 percent, an improvement from the 10.5 percent depreciation recorded in 2023. In terms of real effective value, the Rwf experienced a lower depreciation of 4.5 percent compared to the 10.3 percent observed in 2023.”This was primarily due to higher positive inflation differentials between domestic and foreign inflation observed in December 2024, it said.

In 2024, the franc depreciated by 9.42 percent against the US dollar year-on-year, a significant slowdown from to the 18.05 percent depreciation recorded in 2023.

Read: Rwanda central bank: This is why dollars are scarceThe franc also weakened against other major currencies, although at a slower pace, depreciating by 7.53 percent against the British pound and 2.83 percent against the euro, while appreciating by 1.03 percent against the Japanese yen.

These exchange rate movements contrast sharply with those in 2023, when the franc weakened by 25.50 percent against the British pound, 22.50 percent against the euro, and 10.78 percent against the Japanese yen.

Rwanda’s trade with the East African Community (EAC) continued to expand in 2024, reflecting increased regional demand, but exports to the EAC grew by 8.2 percent to hit $276 million, up from $255 million in 2023.

This growth was driven by higher exports of agricultural products and manufactured goods. Similarly, imports from the EAC increased significantly by 15.2 percent, reaching $998 million in 2024, compared to $866 million in the previous year.

This rise was mainly driven by increased imports of food products, construction materials and manufactured goods, reflecting higher domestic demand and infrastructure development projects.

As a result, Rwanda’s trade deficit with the EAC widened further by 18.1 percent to $722 million from $611 million in 2023, according to the central bank.

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