Foreign exchange reserves are used to stabilize the national currency, According to an expert

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Kinshasa, September 22rd, 2021 (CPA)), – International foreign exchange reserves are used to stabilize the national currency and to pay the public debt (capital and interest), said on Monday an economic expert who reacted to the feat achieved by the government of the Democratic Republic of Congo (DRC), having made it possible to make available 3.3 billion US dollars (USD) in foreign exchange reserves.

According to this expert who spoke to the CPA and who requested anonymity, the international foreign exchange reserves allow, in addition to the stabilization of the national currency, the Congolese franc (FC), but also to pay the external debts to deadline. « These are excess currencies that can be used when prices fall or when faced with outward payment, » the economics expert added.

According to him, the foreign exchange reserves which have really increased, currently give the possibility to the BCC to stabilize the FC given that the DRC is in a system of the floating or flexible exchange rate, before adding that the increase of international reserves is not synonymous with the development of the economy.

He noted that currently in the DRC, 4 (four) out of 21 (twenty-one) provinces can live on their own, while the rest only live on handover.

Referring to the case of the positive evolution of the 2022 Finance Law compared to previous ones, the economic expert noted that any government has ambitions, but they will have to be in well-costed projects after the feasibility studies. The country often knows improvisations at the level of the National Assembly where each deputy seeks to pass a project of his electoral district even without feasibility studies, he said, recommending budgetary discipline to avoid the State the overruns in the consumption of credits allocated to entities or production units.

“Countries that have developed proceed by planning needs, based on their profitability,” he concluded.