Repatriate 40% of mineral sales in foreign currency: a recommendation to stabilize the local currency
In the current economic context, where the Congolese currency is depreciating against the US dollar, economic experts have issued a recommendation to mining operators in the Democratic Republic of Congo (DRC): repatriate 40% of their mineral sales in foreign currency. This measure, in accordance with the exchange legislation of the Central Bank of Congo (BCC), aims to stabilize the local currency on the foreign exchange market.
The disparity between the exchange rate between the Congolese franc and the US dollar is largely explained by the law of supply and demand in the currency market. By opting for a free foreign exchange market, the DRC lets the market adjust according to the supply and demand of foreign currencies.
However, traders who carry out their transactions in Congolese francs often encounter difficulties in obtaining foreign currency, necessary to renew their stocks abroad. This shortage of currencies leads to an increase in their cost on the parallel foreign exchange market, thus impacting the exchange rate between the Congolese franc and the US dollar. This situation directly affects Congolese consumers who see prices increase on the market.
Faced with this situation, experts believe that the Central Bank of Congo could play an important role by injecting part of its foreign exchange reserves, which currently amount to more than 4.33 billion US dollars, on the foreign exchange market. . An injection of funds would rebalance the money supply and curb the continued depreciation of the Congolese franc.
Measures have already been taken by the Congolese government to resolve this problem. A restricted economic situation committee met recently and instructed the Central Bank to use the monetary policy means at its disposal to intervene in the foreign exchange market. However, it is important to stress that the issue of the exchange rate remains complex and requires a multidimensional approach to find lasting solutions.
In conclusion, the recommendation to repatriate 40% of mineral sales in foreign currency is a potential measure to stabilize the local currency in the DRC. However, it is necessary to adopt a comprehensive approach by involving all relevant actors, including the Central Bank of Congo, to find lasting solutions and promote the economic stability of the country.