Historical Sketch

Burundi was founded by king Ntare I. Rushatshi in the late 17th century, oral tradition speaks, however, of a much earlier statehood. In 1884, the German East Africa Company began its colonial activities. The German East Africa territory comprised Burundi and neighbouring Rwanda, which were styled protectorates. During World War I, Belgium and Great Britain occupied the German colony, and the former took over Rwanda-Urundi (using the Swahili form of the country name) as so-called League of Nations Mandate territory, later United Nations Trusteeship, and de facto annexed it to Belgian Congo. The Burundian monarchy nominally remained in place during the colonial period, however reduced to internal and ceremonial matters. In 1962, the Kingdom of Burundi attained independence. Four years later, the monarchy was overthrown in a bloody coup, and the Republic of Burundi was proclaimed.

Monetary History Overview

During most of the colonial period, no distinct monetary order was established, money from German East Africa and Belgian Congo was circulating. In 1952, Belgium created the Central Bank of Belgian Congo and Rwanda-Urundi to take over money issuance for its African possessions. The Congo-Rwanda-Urundi Franc replaced the Congolese Franc on par, which had been issued by a chartered commercial bank. New banknotes and coins were issued in July 1952, the former ones remained in circulation. In 1960, Congo attained independence and immediately abandoned the colonial currency. Rwanda and Burundi remained under colonial rule for two more years and retained their common currency for the time being. The central bank was renamed, and the currency became the Rwanda-Burundi Franc. New banknotes and coins were issued in September 1960, the former ones were withdrawn within a week. After independence of both Rwanda and Burundi in 1962, the relationship between the two countries quickly deteriorated. The monetary union was dissolved by end 1963, and both countries began overprinting the banknotes circulating on their territories, as they had not been ready to create distinct currencies. In May 1964, on the same day as in Rwanda, the Burundian national currency was introduced. The Burundian Franc remained on par with the Belgian Franc for a short while, but already in January 1965 it got devalued by 43% and re-pegged to the US Dollar. Afterwards, the rate remained stable until 1983, when a 23% devaluation was done and the Franc switched anchor currency to the IMF Special Drawing Right (SDR) unit. Between 1986 and 1992 followed a stepwise devaluation of the currency by 50% cumulated, then the exchange rate was set to float in April 1992. Throughout the 1990s, the Franc lost 80% of its value, and after a decade of relative currency stability, another 30% decline has taken place during the 2010s. A next major devaluation was carried out in 2023.

Burundi joined the International Monetary Fund (IMF) on 28.09.1963.

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