Faith Nyasuguta
Rwanda has officially begun enforcing a new law that bans the unauthorized use of foreign currencies – particularly the U.S. dollar – in domestic transactions. The National Bank of Rwanda (NBR) has rolled out strict regulations designed to combat informal dollarization and bolster the use of the national currency, the Rwandan franc. This move is part of a broader strategy aimed at strengthening Rwanda’s monetary policy and ensuring long-term economic stability.
Under the new currency law, businesses and individuals are prohibited from quoting prices, issuing invoices, or conducting trade in U.S dollars or any other foreign currency unless they receive prior approval from the central bank. Violations will be met with stiff penalties: Rwandan Franc (Rwf) 5 million for a first offense and Rwf 10 million for repeat violations. These fines apply to all who display foreign currency prices on websites, accept payments in foreign currencies from local customers, or even reference foreign exchange rates during domestic sales negotiations without official authorization.
According to the NBR, the law is necessary to address growing concerns over the erosion of central bank control due to widespread unofficial use of foreign currencies in the local economy. “The use of foreign currencies in the domestic market without authorization poses a risk to the economy. It reduces the effectiveness of our monetary tools and creates distortions in pricing and competitiveness,” said a spokesperson from the National Bank of Rwanda.
The regulation is particularly aimed at businesses operating in Rwanda’s retail, hospitality and digital commerce sectors, many of which have increasingly defaulted to quoting prices in U.S. dollars – especially on websites and for high-end services. Moving forward, all local transactions must be carried out in Rwandan francs, except in specific cases where exemptions apply.
Those exemptions include transactions related to imports and exports, as well as businesses catering primarily to non-residents, such as hotels, duty-free shops, casinos, tourism agencies, and international schools. However, even these entities must ensure they only conduct such foreign currency transactions with non-residents and must obtain explicit approval from the National Bank.
The NBR Governor, Soraya M. Hakuziyaremye, emphasized that the measure is intended to promote long-term confidence in the Rwandan franc and protect the country’s economic sovereignty. Rwanda, which is positioning itself as a key financial and trade hub in East Africa, sees this reform as essential to building a more self-reliant economy.
Rwanda’s move is part of a wider trend across the continent. In May, Tanzania introduced similar rules banning the use of foreign currencies in domestic transactions. The Bank of Tanzania stated that all payments for goods and services must be made in Tanzanian shillings. Nigeria has gone even further – its Senate recently introduced a bill that would require all payments, including salaries and business transactions, to be made in naira.
Nigeria’s anti-corruption agency, the EFCC, also banned foreign embassies from using foreign currencies in any local transactions, insisting they switch to the naira.
For Rwanda, this enforcement signals a strong national commitment to protecting the Rwandan franc from being overshadowed by foreign currencies and ensuring that the country’s economic future remains firmly in its own hands.
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