Information service of the Pontifical Mission Societies since 1927
Kinshasa (Fides Service)- Uncertainty with regard to peace is one of the main causes for the fall in value of the country’s Franc Congo, according to Jean-Claude Masangu, governor of the Congo Central Bank. Other causes blamed were rising oil prices and falling low-carat diamond prices .
According to local news agency DIA, Mr Masangu distinguished between international and domestic causes. The first include rising international oil prices and falling prices of low-carat diamond both of which produced a large deficit in Congo’s economy. Domestic causes are mainly connected with uncertainty with regard the outcome of transition process and rumours of war in the eastern part of the country where a military rebellion backed by neighbour countries threatens to explode in another war. Political uncertainty is due to ever louder rumours that political elections, scheduled for May or June this year may be postponed (see Fides 11 January 2005). Mr Masangu appealed to the government’s sense of responsibility to help the Central Bank to stop the precipitation of the national currency.
The fall has led the Franc to an all time low of 480 Francs per US dollar. Mr Masangu said that between January and August 2004 the currency suffered and in fact now in January this year inflation could rise to 10.4%.
Illustrating steps taken to stop the fall of the Franc the governor said that 12 million dollars had been injected into the domestic market at the beginning of the week to sustain the national currency and interest rates are expected to rise from 12% to 16% to absorb excess money in circulation. Mr Masangu said the Central Bank will pull out more dollars in the next two weeks should it become necessary and that in 2004 the Bank injected a total of 32 million dollars to sustain the local Franc. (L.M.) (Agenzia Fides 14/1/2005 righe 41 parole 417)
