• The Central Bank of Congo reduced its policy rate from 25% to 17.5% and the marginal lending rate from 30% to 21.5% to ease credit.
• The move follows lower inflation at 7.8% and a stronger franc at 2,548 per dollar, reflecting a more stable economic environment.
• Effects may be limited as most loans remain in dollars; the BCC urges more use of the local currency to support monetary control.

The Central Bank of Congo (BCC) has given a theoretical advantage to strengthening the Congolese franc (CDF) by deciding, following its Monetary Policy Committee (CPM) meeting held on October 7, 2025, to ease its monetary policy significantly. The benchmark interest rate, which determines the cost at which commercial banks refinance themselves with the central bank, was reduced from 25% to 17.5%. In contrast, the marginal lending facility rate, applied to banks facing urgent liquidity needs, was lowered from 30% to 21.5%.

This technical adjustment, the most substantial since 2021, is part of a broader strategy to restore the Congolese franc’s central role in economic transactions, in a country where more than 90% of payments are still denominated in U.S. dollars. According to the CPM’s official statement, the decision is based on a notable improvement in the macroeconomic environment. Inflation, which stood at 15.1% in September 2024, dropped to 7.8% a year later, while the national currency appreciated by around 11.6% on the official market, to about 2,548 CDF per dollar.

This progress results from a series of coordinated interventions, including the injection of foreign currency into the interbank market, improvements in liquidity management within the banking sector, and updates to the exchange rate used to calculate reserve requirements on dollar-denominated holdings. While the reserve ratios remain unchanged (12% for sight deposits and 0% for term deposits in local currency), the BCC plans a gradual adjustment of the exchange rate applied to foreign currency deposits. This move is expected to increase demand for CDF on banks’ balance sheets.

The Central Bank is explicitly encouraging economic agents — both businesses and households — to carry out their transactions in the national currency. This policy direction, previously attempted under earlier administrations, now takes on renewed importance. Behind this monetary objective lies a broader question of sovereignty: the dominance of the dollar limits the Congolese authorities’ room for maneuver, especially in managing liquidity and controlling capital flows. Excessive reliance on the dollar also exposes the economy to unilateral decisions from Washington, such as potential restrictions on the import of U.S. banknotes. By reinforcing the role of the Congolese franc, the BCC aims to reduce this external vulnerability and consolidate internal stability, at a time when the country’s economic fundamentals are improving.

Lowering the benchmark rate theoretically makes financing in CDF cheaper for commercial banks and, by extension, for businesses and the government. The public treasury could therefore refinance its borrowing under more favorable conditions, thereby reducing the interest burden on domestic debt. However, the transmission of monetary policy will need close monitoring. In a financial system where the majority of deposits and loans are denominated in dollars, the rate cut will not automatically translate into lower borrowing costs. Its effectiveness will depend on the banking sector’s ability to mobilize more local-currency liquidity and to strengthen confidence in the CDF.

The Council of Ministers, during its session on October 3, 2025, had already praised the appreciation of the Congolese franc and called for “stimulating greater demand for the national currency,” signaling a convergence between fiscal and monetary policy. The government has also decided to continue collecting part of its taxes in CDF, a move that is expected to increase both the circulation and demand for the local currency. Together, these measures aim to reestablish the CDF as a key economic instrument while supporting price stability and medium-term growth.

The BCC’s monetary easing is a signal of confidence, reflecting the belief that inflationary risks are under control and that the Congolese economy is entering a phase of consolidation. Yet, for this strategy to succeed, three factors will be crucial — strict fiscal discipline to prevent excess liquidity from fueling new price pressures; a stronger banking system to ensure the effective transmission of lower rates; and consistent, transparent communication to rebuild public trust in the Congolese franc.

Idriss Linge