Rwanda says foreign exchange reserve cover has fallen this year - CNBC Africa

Rwanda says foreign exchange reserve cover has fallen this year

East Africa

by Reuters 0

Rwanda's foreign exchange reserves are expected to have fallen. PHOTO: africanbusinessmagazine

This is from 5 months at the end of 2013, mainly due to increased imports of capital goods, the government said in a letter to the IMF released on Friday.

The east African nation's economic growth slowed down sharply in 2013, after key donors suspended aid, but has bounced back this year. The letter to the International Monetary Fund said the growth rate was 6.8 per cent in the first half.

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"The external balance deteriorated somewhat in the first half of 2014, reflecting the pick-up in economic activity, which resulted in acceleration in the imports of capital goods," said the letter, released by the IMF.

Formal exports did not keep up with the growth in imports during the period, growing at just 1.3 per cent in value and only 1.7 per cent in volume, the government said in the letter, without giving absolute numbers or a comparative rise in imports.

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Rwanda has enjoyed stable foreign exchange and inflation rates in recent years, and the government has said it expects the economy to grow by 6 per cent this year.

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