The Democratic Republic of Congo again has only 2.5 weeks of foreign exchange reserves. Nearly $ 700 million, according to the Monetary Policy Committee. The decline in these reserves, crucial in a country that matters for everything, led last year to higher prices and a decline in the Congolese franc. Are we in danger of experiencing the same scenario at the end of the year?
Falling back into a crisis similar to 2019 is what fears former presidential candidate Noel Tshiani, a former senior World Bank staffer who has written several books on the role of central banks. For him, it is urgent to rebuild foreign exchange reserves to avoid further depleting the Congolese.
“We could end up in a situation where there are current depreciations means of payment. And depreciation means increased inflation because most goods, especially consumer goods, are imported from abroad. So under these conditions, the absence of intervention from the Central Bank would suggest an inflation spiral that could have a very negative impact on the purchasing power of the population. ”
For Finance Minister Jean Sele, the current situation differs from last year. Since May, Kinshasa no longer uses the printing press. According to him, the revenue needs to be improved.
“There were a number of measures taken by the government from March to mitigate the perverse effects of Covid, including suspending the levying of VAT on basic foodstuffs. Today, these measures have been lifted and we can see that revenues have increased. ”
Expenditure is also rising, while the DRC is currently struggling to pay the salaries of its agents every month as well as a small portion of the operating budget.
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