Faced with the worrying economic situation in the Democratic Republic of Congo, the Congolese franc continues to experience a sharp depreciation against the US dollar. According to a recent Central Bank report, this depreciation deepened during the month of June 2023, with an indicative exchange rate of 2,411 Congolese francs per US dollar.
This depreciation of the Congolese franc has direct repercussions on inflation, which increased by 0.59% during the last week of June. The prices of food, housing, energy and transport have also increased significantly in the main cities of the country.
To deal with this situation, the Governor of the Central Bank has taken measures, in particular the raising of the Bank’s key rate as well as the increase in the coefficient of the compulsory reserve on deposits in Congolese francs. These measures aim to reduce the pressures exerted by excess liquidity on the prices of goods and on the exchange rate.
However, the Governor also underlined the importance for the government to continue to support local production and reduce dependence on imports. Indeed, the Congolese economy suffers from a strong dependence on imports, which makes the country vulnerable to exchange rate fluctuations.
In addition, speculation on the foreign exchange market was singled out, and the Governor recalled the importance for foreign exchange offices and traders to comply with the regulations issued by the Central Bank, particularly with regard to the display public exchange rates.
In a global economic context marked by sluggish growth and inflationary pressures, the Governor of the Central Bank recommended maintaining coordination between fiscal and monetary policies, as well as compliance with the stability pact which prohibits monetary financing of the deficit of State.
In conclusion, the depreciation of the Congolese franc against the US dollar constitutes a major challenge for the Congolese economy. Measures are being taken to stabilize the situation, but it is essential that the government continues its efforts to promote local production and reduce dependence on imports