1 Franc – Rwanda

In 2003, Rwanda’s currency situation was characterized by relative stability and prudent management under the National Bank of Rwanda (BNR), a significant achievement given the country's recent history. The Rwandan franc (RWF) operated under a managed float, with its value influenced by market forces but actively stabilized by the central bank through strategic interventions. This period followed a major demonetization in 1995, which had successfully removed large amounts of old currency circulated during the genocide from the economy, helping to restore monetary control and confidence. By 2003, inflation was largely under control, averaging in the low single digits, which reflected disciplined fiscal and monetary policies supported by Rwanda's commitments under Heavily Indebted Poor Countries (HIPC) Initiative agreements.

The broader economic context was one of ambitious post-conflict reconstruction and poverty reduction, guided by the government's "Vision 2020" framework. A key focus was deepening financial inclusion and moving away from a cash-dominated society, though in 2003, currency in circulation remained essential for most transactions, particularly in rural areas. The stability of the franc was crucial for encouraging investment and implementing national development programs. The exchange rate regime effectively balanced the need for stability to foster growth with the flexibility to absorb external shocks, with the franc showing moderate and managed depreciation against major currencies like the US dollar to maintain export competitiveness.

Furthermore, Rwanda's currency stability in 2003 was underpinned by substantial donor support and debt relief, which bolstered foreign exchange reserves. This external assistance provided a buffer for the BNR to manage liquidity and exchange rate pressures. While the financial system was still developing, with limited foreign exchange market depth, the central bank's policies successfully provided a stable monetary environment. This stability formed a critical foundation for the rapid economic growth and financial sector modernization that would accelerate in the subsequent years.