DRC: IFC and CBC launch swap facility to increase use of local currency
The initiative will reduce the country's dependency on the US dollar.The International Finance Corporation (IFC) and the Central Bank of Congo (CBC) signed an agreement that enables IFC to swap US dollars for Congolese francs in the DRC.
The IFC said it will use the swap to make franc-denominated investments in the local private sector to increase the use of local currency over the dollar in the economy.
Deogratias Mutombo Mwana Nyembo, Governor of Central Bank of Congo, said: "This is an important step forward in our efforts to de-dollarize the economy and develop the domestic financial markets so they can meet the financing needs of the local private sector."
The agreement increases IFC's ability to make local-currency investments in Congolese companies serving the domestic market.
When companies borrow in the currency in which they generate revenues, they avoid currency risk, which enables companies to focus on growing their operations and creating jobs, the IFC said in a statement.
"Through this agreement we are bringing an innovative financing instrument to the country's domestic financial markets that expands the options entrepreneurs have to borrow from the local markets," said Oumar Seydi, IFC regional director for East and Southern Africa.