Rwanda's dollar-denominated bonds have dropped to their lowest level in over a year as tensions rise over the country's alleged involvement in the conflict in the Democratic Republic of Congo (DRC). The government's decision to reject further aid from Belgium, coupled with accusations that Brussels is attempting to undermine its access to development financing, has further fuelled investor concerns.
On Tuesday, Rwanda's $620 million worth of dollar bonds fell by 2.7%, marking the sharpest decline in nearly three years according to Bloomberg. The downward trend continued on Wednesday, with the bonds slipping another 1.3% to 79.3 cents on the dollar, the lowest since December 2023.
The country is under increasing scrutiny for its alleged support of the M23 rebel group in the DRC, a claim that President Paul Kagame's administration has consistently denied. The situation has prompted international donors to threaten cutting over $1 billion in annual aid, a move that rating agencies warn could severely impact Rwanda's economic growth and exacerbate its already high debt levels.
