(Ecofin Agency) - In mid-June 2023, year-to-date inflation was 9.2%, according to the Central Bank. To preserve price stability, the institution decided to raise its key rate to 11%.

The Central Bank of the Democratic Republic of Congo has raised its key rate by 2 basis points, from 9% to 11%, in a bid to curb inflation. The announcement was made by the banking institution on Monday, June 19.

For the Monetary Policy Committee (MPC), "the persistence of uncertainties in the global economy, especially concerning growth and inflation, as well as internal and external shocks, calls for heightened vigilance in the conduct of monetary and exchange rate policy, and enhanced coordination with fiscal policy."

The East African country’s economy is suffering from the negative impacts of the war in Ukraine and the conflict ongoing in its eastern region. According to the MPC, by mid-June 2023, its inflation had already risen by 9.2% due to rising food prices caused in part by the rising price of imported products.

However, near-stability in currency demand over January-February 2023 led to a fall in the average monthly depreciation rate of the Congolese franc, from 3.6% between January and February to 0.8% between March and May 2023.

In that context, the Central Bank is forecasting growth of 6.8%, driven by the extractive sector, with inflation expected to reach 11.5% in December, down from 13.1% in 2022.

Charlène N’dimon (intern)