Congolese Franc to Record low.
The Congolese franc has dropped 20% against the US dollar this year. This is due to the security and pre-election spending and low revenues.
The Franc has lost more than 20% of its value against the US currency since the beginning of the year, dropping from about 2000 francs to more than 2400 this past week. Congo’s economy grew 8.9% last year, according to the International Monetary Fund. “The government’s revenue shortfalls and rapid spending contributed to a deterioration of the external balance, excess domestic currency liquidity, exchange rate depreciation and persistent inflation” the IMF said in a review of its loan program with Congo.
The scheduled elections for December and government expenditure on a series of violent conflicts in Easter Congo, as well as speculation by money changers are all contributing to the franc’s downward slide. Government spending on salaries for employees, military and Internal debt has flooded the market with francs.
