It is not uncommon for central banks to print the currencies of their respective countries in foreign countries. This is the case of Rwanda.
A banknote or coin is a legally acceptable medium of exchange for goods and services. Banknotes exist all over the world and each country creates its own unique designs considering the security features to maintain their originality against counterfeit crimes.
Only a handful of African countries print their own currencies, with the majority outsourcing the service to European companies.
Rwanda prints its money to a German company called Giesecke+Devrient.
Besides British banknote printing giant De La Rue and Swedish company Crane AB, Giesecke+Devrient is one of the main companies that African central banks are partnering with.
Kasai Ndahiriwe, an economist and director of the monetary policy department at the National Bank of Rwanda, explained that if Rwanda were to print its own currency, the cost of production would be very high.
“Rwanda has the capacity to set up this printing industry, but it would be a loss considering that it would have to shut down for about five years pending the expiration of the life of the previously printed banknotes,” he said. he declared.
The sustainability of a company is the ability to have a continuous flow of production.
Furthermore, adds Ndahiriwe, the main mandate of the National Bank of Rwanda is to protect and preserve the country’s currency, not to produce it.
Without revealing the exact amount the government spends to print the Rwandan franc, Ndahiriwe said that in general the cost is very high.
For example, the cost of printing a 1,000 Rwf banknote is more than its face value.
However, he explained that in the long term, the investment is worth it given that the lifespan of a note can be up to five years and beyond.
Another factor that drives the cost of production is the high level of technology required in terms of security to fight counterfeiting and other related crimes, Ndahiriwe cited.
According to John Rwangombwa, the central bank governor, given the direction Rwanda is taking in terms of cashless economy and digital transformation, there will come a time when printing cash will no longer be necessary.
To this, in early March, the BNR said that it would decide on the creation of a central bank digital currency by December this year.
A study is still underway on the economic, financial and technical aspects related to the CBDC as well as the operationalization model, taking into account the local context.
Digital currency is any currency or money that is handled or traded on digital computer systems, especially the Internet, and never converted to physical form at any time.