KINSHASA Oct 19 Democratic Republic of Congo's
central bank said on Wednesday it has increased the percentage
of deposits banks must keep with it and plans to intervene in
foreign exchange markets to prop up the franc currency and
contain accelerating inflation.
The mining and oil sectors account for some 95 percent of
export revenues in Africa's top copper producer and declining
production has heaped pressure on the franc.
As a result, the government now forecasts inflation, which
was less than 1 percent last year, to run close to 5 percent
In a statement, the central bank said it had raised
mandatory reserve requirements for domestic banks from 10 to 13
percent for short-term deposits and from 9 to 12 percent for
It said the central bank would sell foreign currency on the
market to further support the franc "if the economic
fundamentals require it".
The bank has intervened repeatedly this year to support the
franc, which has depreciated by more than 27 percent against the
U.S. dollar on the parallel market to around 1,191 per dollar.
Its official exchange rate was 1,086 per dollar last Friday.
The slumping economy comes amid political tensions over a
delayed presidential election and the extension of President
Joseph Kabila's term in office until elections in April 2018.
Prime Minister Augustin Matata Ponyo, credited with
overseeing macroeconomic stability since 2012, is set to be
replaced in the coming weeks by an opposition leader as part of
a multi-party accord struck this week.
(Reporting By Amedee Mwarabu Kiboko; Writing by Aaron Ross;
Editing by Matthew Mpoke Bigg and Catherine Evans)