In the ever-changing global economy, some currencies are more vulnerable than others. This is the case of the Congolese franc, which continues to suffer a sharp depreciation against the US dollar. According to a report by the Central Bank of the Democratic Republic of Congo (DRC), this situation raises concerns about the impact on the foreign exchange market as well as on goods and services.
During the last week of June 2023, inflation reached 0.59% compared to the previous week, according to the Governor of the Central Bank. This price increase mainly concerns food products, housing, water, gas, electricity and transport. In addition, an accelerating price trend has been observed in major Congolese cities such as Kinshasa, Lubumbashi and Goma.
Regarding the exchange rate, the report indicates that the Congolese franc has depreciated against the US dollar, with an indicative exchange rate of 2,411 Congolese francs per US dollar. This downward trend was also observed on the parallel market, where the exchange rate stood at 2,427.5 Congolese francs to the dollar.
Faced with this situation, the Central Bank of Congo has taken measures to reduce the pressures exerted on the prices of goods and the exchange rate. These measures include raising the Bank’s key rate and increasing the reserve requirement coefficient on deposits in Congolese francs. However, the Governor stresses the importance for the government to continue to support domestic production and reduce dependence on imports.
In addition, to fight against speculation on the foreign exchange market, the governor recalls the obligation for foreign exchange offices and traders to comply with the regulations of the Central Bank, which prohibits any public display of exchange rates.
In a context of stagnant global economic growth, imported inflation and regional political tensions, the Governor also recommends the coordination of budgetary and monetary policies, as well as the maintenance of the stability pact, which prohibits any monetary financing of the deficit of the State.
This economic situation remains worrying for the DRC, and it is essential to closely monitor the evolution of the foreign exchange market and to put in place adequate measures to stabilize the situation. The authorities must continue to work together to find lasting solutions to preserve the value of the Congolese franc and maintain the country’s economic stability