The Democratic Republic of Congo’s central bank held its benchmark interest rate at the highest level in more than two years, and expects to lower it in months as inflation slows in one of Africa’s biggest metal producers.
The rate was left unchanged at 18.5%, central bank Governor Deogratias Mutombo said in a statement on Twitter following a meeting of the monetary policy committee Tuesday. Policy makers
more than doubled the rate from 7.5% in August amid a depreciating currency and mounting inflationary pressures, partly due to the fallout from the coronavirus pandemic.
Inflation in Congo, the world’s biggest cobalt producer and Africa’s largest source of copper, is projected to ease to 5.5% this year after a 15.7% rise in prices in 2020, Mutombo said in the statement.
“An easing of monetary policy through a downward revision of the benchmark rate is foreseeable in the coming months, following the level of projected inflation,” Mutombo said.
Higher copper and cobalt prices have helped boost the economy, projected to grow by 3.2% in 2021 from 0.8% last year, the central bank said. Reserves fell in the last month from $730 million to $693 million while the Congolese franc remained stable against dollar.
Congo Central Bank More Than Doubles Key Interest Rate to 18.5%