Rwanda financial sector has gone through a transformation process towards being a more resilient and stable which creates many opportunities for global investors, says John Rwangombwa, the governor of the National Bank Rwanda (BNR).
The Central Bank Chief who was speaking at a news conference on Tuesday shortly after BNR quarterly Financial Stability Committee (FSC) and Monetary Policy Committee (MPC) meetings noted that Rwanda’s financial industry remains sound and stable and even shown signs of growth in what have continued to be troubled economic times.
“There is a need to continue strengthening the supervisory functions to support the development of financial institutions and ensure diversification of financial products,” he said. Rwangombwa stated that, MPC decided to maintain the current accommodative monetary policy stance in a bid to continue supporting economic financing.
According to financial stability report, both banking and microfinance sectors hold adequate capital positions whereby end March 2015, their solvency ratios stood at 25.9 percent and 33.4 percent respectively above the 15 percent prudential requirement.
Profits of banking sector continues to improve whereby between March 2014 and March 2015, Return on Assets (ROA) increased from 2. 3 to 2.6 percent and Return on Equity (ROE) increased from 11.9 percent to 14.0 percent.
The insurance sector’s ROA slightly declined from 2.4 percent to 2.3 percent, while ROE maintained the same rate of 3.2 percent, between March 2014 and March 2015.
Non-Performing Loan ratio for banks and microfinance institutions stood at 6.3 percent and 7.7 percent respectively.
In Sub-Saharan Africa, economic activity is expected to slow down to 4.5 percent in 2015 from five percent in 2014 mainly due to falling commodity prices, says Rwanda Central Bank.
Rwangombwa noted that in the view of these developments and expected positive effects from the existing policy stance, the MPC decided to maintain the Key Repo Rate at 6.5 percent in third quarter of 2015.
“As of today, the Rwanda Francs depreciated against the U.S Dollars by 3.3 percent while it has appreciated against the Euro by 3.6 percent and most of regional currencies,” Central Bank governor Boss stated. Enditem