DRC increases interest rate

Jan 18, 2017

The base interest rate has been increased to contain inflation .

The Central Bank of Democratic Republic of Congo has increased its base interest rate by 100 percent in a bid to contain inflation which is running at double digit. Previously set at 7 percent, the interest rate has been increased to 14 percent as made known by the Bank last Saturday. The rise in interest rate will affect banks as demand for loans from borrowers is expected to reduce. The inflation rate in Congo was recorded at 11.20 percent in December of 2016, against the bank's target of 4.2 percent. Previous inflation rate in Congo averaged 21.43 percent from 1999 until 2016, reaching an all-time high of 511.21 percent in December of 2000 and a record low of 1.35 percent in April of 2013 respectively. The Central Bank in a report suggests that Congo's economy is expected to have slowed to a six-year low of 4.3% growth in 2016. The recovery of the economy in 2017 could be undermined by flagging demand for exports.