(Ecofin Agency) - In a statement released on Monday, the Central Bank of the Democratic Republic of Congo said it would raise its benchmark rate from 14% to 20% to stabilize local currency, Congolese franc, as it is too volatile.

“In order to face the growing exchange rate and reduce increase of local prices, the Central Bank of Congo has once again reinforced its monetary policy,” the statement indicates.

The economy of the country which is the main exporter of copper in Africa, was greatly affected by the global fall in prices of commodities over the past two years. As a result, foreign exchanges slumped as local market became more demanding.

In 2016, the local currency lost half of its value against the dollar, due to low tax revenues from foreign investors and widening of public deficit. Truly, at the beginning of June this year, a dollar traded at 995 to 000 Congolese francs in the streets of Kinshasa. Fluctuations in exchange rates have sustained inflation which has attained a nearly unbearable level.

In January this year, the Central Bank had already doubles its benchmark rate from 7% to 14%. This aimed at reducing inflation, which stood at 11.2% in December 2016, below 10%.

For this year, the Apex bank expects the economy to grow 3.1%.

Fiacre E. Kakpo