The Central Bank of Congo appears to have acted quickly and effectively to halt last week's nosedive in the Congo's currency, which plummeted from 680 francs per dollar to over 850 in some places. It raised key interest rates from 28 percent to 40 percent to 55 percent, injected dollars into the foreign exchange markets, and raised banks' reserve requirements from five to seven percent. The result was immediate: the franc strengthened to under 600 per dollar by week's end. Good analysis here from Le Potentiel.
In related news, Reuters reports that the DRC is seeking an emergency $200 million loan from the International Monetary Fund to halt the rapidly worsening financial crisis.
The impression this leaves is that the DRC's top financial people are actually a quite competent and serious group, able to staunch a run on their currency through bold and aggressive action. That's a very hopeful sign.
Showing posts with label IMF. Show all posts
Showing posts with label IMF. Show all posts
Monday, January 12, 2009
Thursday, December 18, 2008
Foreign Direct Investment in DR Congo Plunges
The IMF has slashed its projection for direct foreign investment in Congo for 2009 from $2.5bn to $800m.
It also cut its 2009 growth forecast by more than half to 4.4 percent due to weak demand for the DRC's commodity exports.
I have to say that to my non-expert eye, a growth rate of 4.4 percent is perhaps not as bad as it could be--given that we are widely said to be in the midst of the worst economic downturn since the Great Depression.
It also cut its 2009 growth forecast by more than half to 4.4 percent due to weak demand for the DRC's commodity exports.
I have to say that to my non-expert eye, a growth rate of 4.4 percent is perhaps not as bad as it could be--given that we are widely said to be in the midst of the worst economic downturn since the Great Depression.
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