Annual Report on Exchange Arrangements and Exchange Restrictions 2005


International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: December 10, 1998.
Exchange Arrangement
CurrencyThe currency of Rwanda is the Rwanda franc.
Exchange rate structureUnitary.
Managed floating with no predetermined path for the exchange rateThe exchange rate of the Rwanda franc is determined in the foreign exchange market; however, the authorities intervene to influence the rate. A foreign exchange auction system is in effect. Banks may apply a variable commission to exchange operations. The National Bank of Rwanda (NBR) does not announce official exchange rates, but it calculates and publishes daily the average market exchange rate for reference purposes.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketA forward exchange market, in which banks may take forward positions of 1–12 months on behalf of exporters and importers, has been established; however, it is not yet operational.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsBanknotes and coins issued by the NBR are the only legal tender, but payments with foreign banknotes are permitted.
Payments arrangements
Regional arrangementsThe NBR maintains agreements with the central banks of the CEPGL countries. The settlement mechanism under the agreements is not operational. Payments to and from other member countries of the COMESA are made through reciprocal accounts in convertible currencies. The COMESA clearinghouse currently is being restructured because of a declining volume of transactions.
Clearing agreementsYes.
Barter agreements and open accountsAn arrangement exists with Uganda, but it is not operational.
Administration of controlForeign exchange control authority is vested in the NBR, which has delegated authority to authorized banks and foreign exchange bureaus to carry out some of the controls.
International security restrictionsNo.
Payments arrears
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeTrade is restricted to dealers approved by the relevant ministry.
Controls on external tradeImports and exports of gold require a declaration.
Controls on exports and imports of banknotes
On exports
Domestic currencyA declaration is required for exports of banknotes exceeding the equivalent of $100.
Foreign currencyForeign exchange purchased from an AD or foreign exchange bureau may be exported freely. Foreign exchange declared to customs on entry into the country may be reexported upon presentation of the declaration documents.
On imports
Domestic currencyA declaration is required for the import of domestic banknotes exceeding the equivalent of $100 a year.
Resident Accounts
Foreign exchange accounts permittedForeign currency withdrawals exceeding the equivalent of $50,000 a year require supporting documentation.
Held domesticallyYes.
Held abroadYes.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedSupporting documentation is required for deposits of foreign currency by residents and nonresidents, and deposits from nonresidents’ or residents’ domestic and/or foreign currency accounts.
Domestic currency accountsYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsImports are generally paid for after delivery. However, authorized banks may make advance payments upon the presentation of supporting documentation showing that such payment is needed. They may also sell up to the equivalent of $50,000 in foreign exchange to importers who request this for imports of goods and services, with supporting documents to be presented later; such transactions must be settled by check or bank transfer.
Preshipment inspectionEffective January 6, 2004, preshipment inspection for imports is no longer required. Previously, imports with an f.o.b. value of the equivalent of $5,000 or more ($3,000 for fresh foodstuffs and pharmaceuticals) and any partial deliveries of these goods were required to be inspected by an international agency with regard to the quality, quantity, price, and customs tariff of the goods before they were shipped to Rwanda, unless otherwise authorized by the NBR.
Import licenses used as exchange licensesYes.
OtherImports with an f.o.b. value of the equivalent of $5,000 or more are subject to a bank import declaration. A reduced limit of $3,000 applies to fresh foodstuffs and pharmaceutical products. These declarations must be accompanied by a pro forma invoice stating the f.o.b. value of the merchandise.
Import licenses and other nontariff measures
Negative listAll imports of narcotics are prohibited. Certain categories of imports, such as explosives and weapons, require prior approval from the relevant authorities, regardless of origin and value. For reasons of health, the importation of human or veterinary medicines, disinfectants, insecticides, rodent poisons, fungicides, herbicides, and other toxic or potentially toxic chemicals is subject to the approval of the relevant pro forma invoices by the Ministry of Health.
Open general licensesYes.
Import taxes and/or tariffsEffective January 6, 2004, the levy to cover inspection costs was revoked. Previously, in addition to customs duty, a file-processing charge equal to 0.67% of the f.o.b. value of imported general merchandise was levied, to cover costs incurred by the inspection agency. This rate was increased to 0.87% for pharmaceutical products and fresh foodstuffs. In both cases, the minimum payment was set at the equivalent of $180. Consumption taxes of 57% on malted beer and 10% on powdered milk and mineral water apply. Gasoline-powered vehicles other than passenger vehicles, trucks, and pickup trucks of less than 1,500 cm3, 1,500–2,500 cm3, and more than 2,500 cm3 are subject to consumption taxes of 50%, 10%, and 15%, respectively.
The maximum import tariff is 30%. The intermediate rates are 5% and 15%. Most capital goods are exempt from tariff. Tariffs for imports from COMESA members, which had been reduced in stages to 10% of normal rates, were eliminated on January 1, 2004. The import tariff rate on finished products is 30% of the c.i.f. value.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds must be repatriated within 90 days of the export date. They may be held in their entirety in foreign exchange accounts maintained by the exporter at local authorized banks or sold on the foreign exchange market for Rwanda francs.
Financing requirementsNo.
Documentation requirementsA bank export declaration form is required for exports exceeding $10,000 or its equivalent.
Export licenses
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAuthorized banks are permitted to transfer foreign exchange without restriction to cover payment of the following invisible transactions on terms defined by each bank: dividends; salaries of directors and managers and professional fees; copyrights and royalties; merchandise repair costs; interest payments on credit cards to foreign companies; reinsurance premiums; reimbursements of expenses owed to foreign airline companies; advertising costs; rental and leasing costs; maritime, road, and air transportation and transit costs; subscription fees for newspapers, periodicals, and membership in trade organizations and professional associations; and costs of correspondence courses and books.
Payments for travel
Quantitative limitsThe maximum tourism allowance is $5,000 or its equivalent a person a trip. In the case of business travel, the maximum amount is $10,000 or its equivalent a person a year.
Personal paymentsPayment of pensions requires NBR approval.
Prior approvalYes.
Quantitative limitsOn presentation of invoices or estimates for care received, authorized banks may transfer freely foreign exchange for medical care to be received by Rwandese residents. In the case of estimates, authorized banks must require their customers to present final invoices at the end of treatment. Authorized banks may sell a maximum of $5,000 or its equivalent in other foreign currency to residents undergoing medical treatment abroad, or to any person accompanying them, to cover living expenses. In addition, authorized banks may transfer foreign exchange abroad without restriction for educational expenses of Rwandese residents or persons in their charge on presentation of a letter of acceptance, or certificate of attendance for the period indicated, from a recognized educational institution, and a detailed description of required fees—in particular for tuition, rent, or purchases of books and other supplies.
Residents may also transfer up to a maximum of $25,000 a year or its equivalent in another currency to cover accommodation and subsistence costs of a Rwandese student abroad.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Quantitative limitsAuthorized banks may approve salary and wage transfers of expatriates working in Rwanda up to a maximum of 70% of their net remuneration after payment of taxes and social security contributions.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds must be repatriated within three months of receipt and sold in the domestic foreign exchange market, or be held in foreign exchange accounts with authorized local banks. Any delay must be reported to the NBR.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsCurrently, only the money market is operational. Transactions are governed by the relevant business law provisions. In addition, requests by nonresidents for treasury note purchases must be submitted to the NBR. Requests for interest payments and proceeds from sales of treasury notes to nonresidents are approved by the NBR on presentation of adequate proof that the requesting party is the holder.
On capital market securities
Shares or other securities of a participating natureControls apply to all these transactions. NBR approval is required for purchase abroad by residents.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsNBR approval is required.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsNonresidents may participate in the secondary market.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsNBR approval is required.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsNBR approval is required.
Sale or issue abroad by residentsSale proceeds must be repatriated.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNBR approval is required for residents to receive foreign exchange loans from nonresidents for business purposes. After approval, the NBR issues a registration certificate. Authorized banks may effect repayment of a foreign exchange loan from a nonresident to a resident on presentation of a copy of the loan agreement and the loan registration certificate issued by the NBR.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesNBR approval is required.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentNBR approval is required.
Inward direct investmentForeign direct investment in Rwanda and the purchase of Rwandese shares by nonresident foreigners are not restricted, but must be registered with the NBR.
Controls on liquidation of direct investmentSubsequent repatriation of current investment income and net proceeds from the transfer or liquidation of capital invested with foreign exchange originating abroad may be freely effected by authorized banks. Banks must require their customers to produce the registration certificate issued by the NBR, as well as all information and supporting documentation required by the NBR.
Controls on real estate transactionsNo.
Controls on personal capital transactions
LoansNBR approval is required.
By residents to nonresidentsYes.
To residents from nonresidentsProof of transfer of the funds to Rwanda is required at the time of payment.
Transfer of assets
Transfer abroad by emigrantsNBR approval is required for goods and other assets with a value exceeding $10,000 or its equivalent.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadCommercial bank borrowing is subject to the same provisions as borrowing by natural or legal entities.
Maintenance of accounts abroadAuthorized banks may open accounts abroad and maintain credit balances in accordance with prudential rules established by the NBR on the limits on foreign exchange holdings.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsBanks are required to deposit foreign exchange reserves with the NBR with respect to their off-balance-sheet foreign exchange liabilities expressed in dollars.
Investment regulations
In banks by nonresidentsYes.
Open foreign exchange position limitsLong and short positions are subject to limits of about 20% of banks’ capital and reserves.
On resident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2004
Imports and import paymentsJanuary 1. The tariff on imports from COMESA members was reduced to zero from 10% of the normal tariff rate.
January 6. Preshipment inspections for imports and the pre-inspection levy were abolished.

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