What's Happening?
Rwanda's central bank has addressed concerns over the declining acceptance of low-denomination coins by businesses, emphasizing that all coins remain legal tender. This issue was highlighted during a recent Monetary Policy and Financial Stability Committee
press briefing, where complaints were raised about merchants refusing smaller coins like the Rwf20. Chantal Kasangwa, Executive Director for Markets and Banking Operations at the National Bank of Rwanda, confirmed the validity of all coin denominations and urged businesses to continue accepting them. The reluctance to use coins is attributed to the growing reliance on digital payments, which have reshaped payment habits, especially in urban areas. Despite the push towards a cashless economy, coins are still crucial for low-value transactions, particularly in informal and rural markets.
Why It's Important?
The central bank's reaffirmation of coin validity is significant as it addresses a growing challenge in Rwanda's transition to a cashless economy. The shift towards digital payments has led to a decrease in the use of coins, impacting small transactions and potentially marginalizing those without access to digital platforms. By encouraging businesses to accept coins, the central bank aims to ensure inclusivity in financial transactions. This move also highlights the balance needed between embracing digital innovation and maintaining traditional payment methods to cater to all segments of society. The situation underscores the broader implications of digital transformation on financial systems and consumer behavior.
