BCC again cuts its key rate by 5%

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Kinshasa, April 19th, 2021 (CPA).– The Central Bank of Congo (BCC) has, in its press release received on Friday at CPA, announced, once again, the reduction of its key rate by 5%, or 15, 5% to 10.5%.

This decision came at the end of the 3rd meeting of the monetary policy committee (PMC) chaired by the Governor of BCC, Deogratias Mutombo Mwana Nyembo.

This rate, which will be effective from Monday, April 19th of the current year, is explained by the stability observed since the start of 2021 in the two segments of the foreign exchange market.

« With the respect of the commitments made at the level of the » Stability Pact « at the level of budget execution on a cash basis, we generate either surpluses over the month, or small deficits which are covered by budget support, or by issuance of treasury bills. With an annualized rate of 4.6 in terms of inflation, a key rate of 15.5% still seemed high. That’s why we have decided to revise it downwards to 10.5%”,said the governor of BCC.

According to him, the objective is also that of reducing the commercial charges of the commercial banks which refinance themselves with BCC, with the objective in particular, of reducing this margin of positivity between the rate of 15.5% and the rate of inflation, because with the current tightening, most of the banks are in deficit.

Deogratias Mutombo also hinted that since the beginning of this year 2021, the national currency has lost only 1.06%. In terms of inflation, a cumulative rate is 1% and 4% annualized. This is within the limits of the target (7%) set for the medium term, unlike 2020 year.

 As a reminder, on March 12th, BCC had, at the end of the second meeting of the monetary policy committee (CPM), lowered its key rate by 3% from 18.5% to 15.5%. ACP /Dimuka and Lukusa /GM