OWN CORRESPONDENT, Kinshasa | Tuesday 2.15pm.
THE central bank of Democratic Republic of Congo (DRC) will stop printing money on Tuesday in an effort to halt the collapse of the local franc, whose value has more than halved in three months. At the same time, proposed government monopolies on the sale of gold and diamonds will be scuttled.
“The accelerated depreciation of the Congolese franc (FC) against foreign currencies and the giddy price rises… [together with] the war situation which is paralysing the whole economy in the east” are the causes of the inflation, Central Bank Governor Jean-Claude Masangu said on Tuesday.
The value of the Congolese franc has fallen by 64% since the beginning of August, when Tutsi-led rebels launched their offensive against the government of President Laurent Kabila.
“The war has caused a drastic fall in state revenue, forcing the state to finance its expenditure to a large extent with central bank loans,” said Masangu, who denounced “attacks on the FC by pumping” fake banknotes into circulation. The drop in revenue is also partly due to smuggling of gold and diamonds, which the proposed monopolies were intended to stop.
The central bank called on businesses, “most particularly commercial banks and large companies”, to “systematically check” 100000 New Zaire and 20 FC banknotes” and to “denounce those holding counterfeits.”
As of mid-October, the Zairean currency quoted on international markets was officially trading at around 137500 to the dollar. The central bank has launched a complex monetary reform programme, foreseeing the presence of three currencies — including a currency still around called the Zaire — for a year until monetary unification takes place. — AFP