Rwanda was founded latest in the early 15th century when king (mwami) Cyilima I Rugwe united the different clans, oral tradition speaks, however, of a much earlier statehood. In the late 19th century, together with neighboring Burundi, it was placed under a German protectorate where it got administered out of German East Africa. After the First World War, the German territories were handed over to the victors. Rwanda-Burundi came under Belgian rule, as so-called League of Nations mandate territory, and was de facto annexed to Belgian Congo. The monarchy remained in place during the colonial period and was overthrown briefly before the Belgians left. In 1962, Rwanda attained independence. In 1994, the ethnic-social tensions culminated in a massacre orchestrated by the government of the period. The killing was ended when an invasion out of neighboring Uganda ousted the government in favor of a rebel movement, which has remained in power since then.

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 at 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 the 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 New banknotes and coins were issued in September 1960, the former ones were withdrawn within a week.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 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 counterstamping 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 Burundi, the national currency was introduced. The Rwandan Franc remained at par with the Belgian Franc for two years, until in April 1966, it got devalued by 50% and repegged to the US Dollar. Afterwards, the rate remained stable until 1990, when a 40% devaluation was done, followed by another 15% two years later. In 1983, the Franc had already repegged to the IMF Special Drawing Right (SDR) unit. In July 1994, the Revolutionary Patriotic Front overthrew the Rwandan government as a reaction to the genocide that had been going on since April. In January 1995, an exchange of banknotes was carried out at short notice and with borders closed in order to dispossess persons who had fled the country after the government change. In following March, the Franc was devalued by 42% and set to float. It lost about 40% until the end of the 1990s, and after a decade of relative currency stability, another decline has started in the mid-2010s.

Rwanda joined the International Monetary Fund (IMF) on 30.09.1963.

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