Friday, October 17, 2014

A quick update on the dedollarization process

As you may (not) know, the Congolese authorities have started a process to “dedollarize” the economy two years ago. The goal is to ensure the Congolese Franc is progressively replacing the USD in the country’s daily operations. Several measures such as the obligation to pay taxes in the local currencies or the interdiction for commercial banks to lend to households in USD have been implemented to ensure this objective is reached in a 5-7 years horizon.

So, how are we performing more than two years after the start of this process? Well, I will just give one figure to illustrate the situation. As of December 2013, 85.1% of all banks deposits were in USD. 6 months later, the figures increase to 86%! Not the expected result…

Obviously, we should not expect obtaining significant improvement in such a short period of time but ideally it would have been good to notice at least a reduction of the phenomenon and not the opposite.  

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