Kinshasa, June 19th, 2021 (CPA).– The Central Bank of Congo (BCC) has just lowered its key rate by two points, from 10.5% to 8.5%, indicates Deogratias Mutombo Mwana Nyembo, governor of this institution of ‘issue, Thursday during the 5th meeting of the Monetary Policy Committee (MCP)
This decision by the Central Bank of Congo is part of the perspective of maintaining macroeconomic stability over the coming months, the source said. It indicates that it also aims to lower the cost of refinancing to banks in order to allow them to easily rebalance their positions and improve the conditions of their support to the economy.
In the same framework, the coefficients of the compulsory reserve on sight and term currency deposits are maintained at 13.0% and 12.0% respectively and those for sight and term deposits in national currency at 0.0 %.
To regulate liquidity, the BCC continues with the Treasury Bond while maintaining the momentum of collaboration for the consolidation of the stability of the macroeconomic situation.
Regarding the monetary sector, the balance sheet of the BCC shows a monthly increase in the monetary base of 309.7 billion CDF in May against 29.7 billion in April, following a significant increase in net foreign assets. The overall outstanding amount of BCC Bons remained at CDF 15.0 billion, and free assets remained negative at CDF -365.4 billion.
Growth forecasts estimated at 4.9%
The Monetary Policy Committee also notes an acceleration in economic activity in 2021 compared to 2020 when forecasts establish growth at 4.9%, from 1.7% the previous year. Indeed, the opinion of business leaders reveals the maintenance of confidence. As for the development of the economic situation in the short term, the gross balance stood at + 16.2% from 16.0% the previous month.
In the goods and services market, there was a deceleration in the rate of price formation, placing the inflation rate at 0.433% last May against 0.466% in April.
Year-on-year, the inflation rate stands at 11.687% and 1.939%, year-to-date at 4.871%, i.e. end of December 2021, all other things being equal, while the target remains at 7.0%, at middle term.
However, it was noted a good behavior of public finances, the financial operations having a surplus balance of 113.1 billion CDF, carried mainly by the payment of the tax of the first provisional installment during this fiscal deadline. Revenues mobilized amounted to CDF 1,016.4 billion against a monthly programming of 859.5 billion. As for expenses, they amounted to CDF 903.2 billion against a forecast amount of CDF 789.8 billion.
In the foreign exchange market, the two segments evolved in a divergent way. In fact, as of May 31, the exchange rate stood at CDF 1,989.14 respectively for the US dollar in the indicative and CDF 2,025.00 in parallel, i.e. a slight monthly appreciation of 0.01% for the first and a depreciation of 0.63% for the second. Since the start of the year, the Congolese franc has depreciated slightly by 0.91% and 0.23%, respectively at the indicator and at the parallel. Foreign exchange reserves increased by USD 453.9 million month over month to USD 1,237.6 million, or more than 5 weeks of imports of goods and services from own resources. As of June 14, they even reached 1,392.2 million USD.
This increase is explained both by the strategy put in place by the Central Bank of Congo aimed at maximizing interbank purchases of currencies and by the decrease in their consumption by the treasury.
Thus, the Central Bank maintains its actions undertaken to consolidate this stability through, in particular, better regulation of bank liquidity, the accumulation of the level of foreign exchange reserves and the respect of the commitments of the stability pact with the government. ACP/