The Rwanda Franc has started gaining ground on the US dollar after over two months of sustained depreciation against the greenback.
The local unit has been relatively stable for the last two weeks. However, it has gained an average of about Rwf1 in the past few days, thanks to central bank intervention. The franc was quoted at an average of 655.4/667.9 on Tuesday against the dollar, a slight appreciation compared to 655.8/668.4 last week. It was stable yesterday compared to Tuesday, with dealers quoting it at an average of 665.6/680; the central bank quoted the unit at 661.7/667.9, unchanged compared to Tuesday.
John Rwangombwa, the National Bank of Rwanda governor, said the central bank intervened in the market on the selling side to "ease pressure on the Rwanda Franc".
"There was some speculation, so we had to come in assure the market," he said.
Richard Ngabonziza, the head of treasury and institutional banking at KCB Bank Rwanda, said the central bank's on a regular intervention was giving the franc the much-needed breather against the foreign currencies.
"It has also increased the public confidence, especially among the business community, and reduced speculation. If the central bank continues intervening, we will see the franc appreciating significantly."
On Tuesday, KCB Bank Rwanda was exchanging the dollar at 667/685.3 compared to 667/685.9 on Monday, and 667/680 yesterday.
The euro was, however, up against the franc, with the central bank quoting it at 904.7/913.3 yesterday compared to 904/91913 on Tuesday. The pound was down at 1,067.5/1,077.6 compared to 1,069.7/1,079.8 yesterday.
The franc woes started when the local unit hit a nine-month record low of 655/660 on July 21. Since then, the situation has been getting worse, but the trend now seem to be turning around in favour of the franc.