The move is part of broader efforts to tighten control over foreign exchange operations and reinforce the role of the Rwandan franc as the country's legal tender, following a rise in cases such as tenants being asked to pay in dollars for business or residential premises.
Under the new directive, individuals or businesses not authorised by the Central Bank are prohibited from quoting, advertising, or receiving payments in foreign currency for goods or services within Rwanda.
Violators face steep penalties, with fines of Frw 5 million for a first offence and Frw 10 million for repeat violations.
The revised regulation, inserted as Article 20 bis into Regulation No. 42/2022, clarifies that only payments linked to exports or imports are permitted to be made in foreign currencies.
All other domestic transactions must be priced and conducted in Rwandan francs, unless the Central Bank grants special authorisation.
The term "pricing in foreign currency" is broadly defined to include not only charging clients in foreign currencies, but also displaying prices in foreign currency, verbal or written communication of such pricing, advertising, invoicing, or including foreign currency amounts in contracts.
Additionally, unauthorised foreign currency transactions, such as accepting payment in foreign currency, are penalised more severely. First-time offenders may be fined 50% of the transacted amount, while repeat offenders risk fines of up to 100% of the foreign currency involved.
The regulation applies to both residents and non-residents operating in Rwanda. Licensed financial intermediaries and authorised dealers are also subject to penalties if they breach the foreign currency pricing rules when dealing with residents.
To ensure compliance, the Central Bank will collaborate with other relevant institutions and has been granted the authority to impose sanctions. Defaulters who fail to pay imposed penalties within 15 days will be reported to the Credit Bureau and charged an additional 1% of the unpaid amount per day of delay.
Furthermore, the regulation introduces whistleblower provisions under Article 37 bis, obligating every person to report any unauthorised foreign currency operations to the Central Bank. Whistleblowers will be protected in line with applicable laws.
The Central Bank has stated that these reforms aim to promote financial stability, protect the integrity of the local currency, and combat unofficial foreign exchange activities that could distort Rwanda's monetary policy.
Wycliffe Nyamasege
