Dollar dominance back on agenda in DRC
Strengthening the franc would improve the public's purchasing power and help to accelerate the de-dollarisation process.
ANNIE THOMAS
DR Congo has revived a long-standing dream of promoting the national currency and side lining the dollar to regain control over key economic levers.
The Democratic Republic of Congo's economy became informally "dollarised" several decades ago under the dictatorship of Marshal Mobutu Sese Seko, whose chaotic rule bred four-digit inflation.
The dollar is used in major contracts, business transactions and the bank accounts of the well-heeled, and even accepted by shopkeepers and in cash machines.
"The US dollar is the common currency, just as English is the common language," said a vendor in "Le Chateau", the nickname for a small street in Kinshasa's business district studded with the umbrellas of money-changers.
The use of the dollar tamed hyperinflation, but also sapped the government's room to shape fiscal policy and spending, which are the basic tools of economic management.
Foreign currencies are believed to account for more than 90% of the money supply in this sprawling country of more than 2.3 million square kilometres.
Stable currency
Now, the authorities are once again mulling how to boost the standing of the Congolese franc, although thinking is still at an early stage.Strengthening the franc would improve the public's purchasing power and help to "accelerate the de-dollarisation process," the report said.
The way of achieving this would be through "a series of measures aimed at using the Congolese franc as the unit of account for all transactions," the report said.
Measures forced through at the end of the 1990s fell short because of a recession linked to war in the east of the country and a flourishing black market in foreign exchange.
Conflict in the east, pitting armed groups against each other and the army, persists to this day.
Another bid was launched in 2012, when the government had high hopes for growth and new high-denomination bills of Congolese francs. -Nampa/AFP
DR Congo has revived a long-standing dream of promoting the national currency and side lining the dollar to regain control over key economic levers.
The Democratic Republic of Congo's economy became informally "dollarised" several decades ago under the dictatorship of Marshal Mobutu Sese Seko, whose chaotic rule bred four-digit inflation.
The dollar is used in major contracts, business transactions and the bank accounts of the well-heeled, and even accepted by shopkeepers and in cash machines.
"The US dollar is the common currency, just as English is the common language," said a vendor in "Le Chateau", the nickname for a small street in Kinshasa's business district studded with the umbrellas of money-changers.
The use of the dollar tamed hyperinflation, but also sapped the government's room to shape fiscal policy and spending, which are the basic tools of economic management.
Foreign currencies are believed to account for more than 90% of the money supply in this sprawling country of more than 2.3 million square kilometres.
Stable currency
Now, the authorities are once again mulling how to boost the standing of the Congolese franc, although thinking is still at an early stage.Strengthening the franc would improve the public's purchasing power and help to "accelerate the de-dollarisation process," the report said.
The way of achieving this would be through "a series of measures aimed at using the Congolese franc as the unit of account for all transactions," the report said.
Measures forced through at the end of the 1990s fell short because of a recession linked to war in the east of the country and a flourishing black market in foreign exchange.
Conflict in the east, pitting armed groups against each other and the army, persists to this day.
Another bid was launched in 2012, when the government had high hopes for growth and new high-denomination bills of Congolese francs. -Nampa/AFP
Kommentaar
Republikein
Geen kommentaar is op hierdie artikel gelaat nie