Tue dole of National Bank of Rwanda from 1995 to 2010
par Paterne RUKUNDO
National university of Rwanda - A0 2011
Main mission of the Rwandan central bank are to ensure and maintain price stability, to enhance and maintain a stable and competitive financial system without any exclusion, to support government general economic policies, promoting investment or regulating international currency movements. (NBR, website)
The objectives the BNR are to preserve the value of the currency and to ensure its stability. To do so it exercises control on money supply and credit, it ensures good functioning of the money and the foreign exchange markets. It controls the working of the banking and financial system.
Being the central bank, it has the exclusive right to carry out the following activities so as to fulfill its objectives:
Issue of currency, act as a bank for the government, control foreign exchange and manage foreign services.
The NBR is the monetary authority of the state, it formulates monetary policy, supervises all banks and quite often carriers out research for economic planning purposes.
It is the duty of the NBR to ensure quality of the Rwandan francs, in times of durability, portability and more importantly ensure a stable parity with other currencies.
In its capacity as the government's bank, the NBR does hold the government accounts, administers all government transactions and lends to government, though at an interest. The NBR sells government treasury bills. In ensuring a good and effective foreign exchange market, the NBR controls and manages foreign reserves. In pursuing that, the NBR carries out the following duties:
- Fixing the exchange rate at a realistic level to ensure an equitable balance of payment and price stability.
- Suppress the double foreign exchange market
- Liberalizing trade, both imports and exports and capital transfers.
The NBR, in its duty to ensure an effective foreign exchange market, introduced forex-bureau and liberalized the exchange rate, to be determined by forces of demand and supply.
In the domain of institution reform, on 26 July 1997, the act of parliament No.11/97 was passed promulgating the National Bank's statutes. The statutes confer to the bank larger autonomy and powers than before, necessary to fulfill its mission.
With respect to the bank circular No.02/97 of August 12th 1997 reorganizing the money market, the NBR now has autonomous authority, on the money market, since that date. (NBR, website) Important objectives of the bank are as follows: Issuing currencies, Managing foreign exchange, Reserves, Regulates the money market, Maintaining relationship with the Government and public institutions.