Rwanda’s trade deficit with EAC narrows 36%: central bank

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Rwanda’s trade deficit with the East African Community (EAC) bloc narrowed by 36.4% to $289.1 million in 2019 from 454.8 million in 2018, the central bank said Tuesday.

Rwanda’s exports to other East African Community member countries, accounted for 16.8% of the total exports in 2019, John Rwangombwa, governor of the National Bank of Rwanda said while presenting the first Monetary Policy and Financial Stability statement of 2020 in the capital Kigali.

Since the inception of Made in Rwanda in 2017, according Rwangombwa, export receipts from the local products have continued to rise, contributing to the diversification of Rwanda’s exports.

Rwanda’s trade deficit increased by $215.5 million or 16.3%, to $1,538.9 million in 2019, the central bank figures show.

The Rwandan financial system is expected to remain sound and stable in the near term and the medium term, the central bank predicts.

The economy is expected to continue performing well in 2020 projected at around 8.1% while inflation is projected to evolve slightly above 5%.

Rwandan franc depreciation against the dollar is projected at around 4.7% in 2020.

Relative to December 2018, the franc depreciated by 4.9% against the dollar by end of December 2019, higher than 4.0% recorded in 2018, mostly owing to high import bill for capital and intermediary goods, the governor said.

Based on the inflation outlook and risks associated to the global economy, the National Bank of Rwanda will continue to conduct a prudent monetary policy to ensure macroeconomic stability, he added.

In 2019, the economy recorded a double-digit growth.
For the first three quarters of 2019, economic growth averaged 10.9% compared to 8.3% registered in the same period of 2018, according to the central bank.

Rwanda’s imports grew by 10.6% in 2019 mainly due to high domestic demand of capital goods, linked to ongoing projects and intermediary goods on the back of a developing construction sector.

The central bank attributed the recorded increase mainly to good performance of re-exports and non-traditional exports.

In 2019, headline inflation increased to 2.4 percent on average from 1.4 percent recorded in 2018. The uptick in headline inflation was mainly attributed to the rise in food inflation since the second half of 2019.

Meanwhile as of December 2019, the number of mobile banking users increased by 12% from 1.8 million to more than 2 million, according to figures from the central bank.

During 2019, the mobile payment transactions increased by 26.3% from Rwf 299.9 million worth Rwf 1,808 billion in December 2018 to 378.8 million worth Rwf 2,349 billion in December 2019.

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