Congo franc. Photo/courtesy.
The Democratic Republic of Congo’s franc has surged to become Africa’s best-performing currency this year, buoyed by rising foreign-currency reserves, tight monetary policy, and a global copper rally that continues to reshape the country’s economic outlook.
A jump in the DRC’s foreign-currency holdings and recent policy adjustments by the central bank have powered an almost twenty-nine percent appreciation of the franc against the dollar placing it level with Ghana’s cedi, which had dominated much of the year, according to Bloomberg data.
President Félix Tshisekedi said in his state-of-the-nation address on Monday that Congo’s foreign-currency reserves have risen by twenty-one percent over the past year to reach seven-point-four billion dollars.
Africa’s largest copper producer is benefiting from a thirty-two percent rise in global copper prices this year. Demand from data centers and electric-vehicle manufacturers is deepening a supply squeeze, as smelting capacity expands faster than mining output and a series of outages further restricts raw materials.
The franc’s strengthening has brought a “stability that our people haven’t known for many years,” Tshisekedi said in the televised speech.
Other African commodity exporters among them Ghana, Zambia, South Africa and Congo are also enjoying stronger currencies helped by high global prices for gold, silver and industrial metals.
Targeted monetary policy has further supported the franc in recent months, said Sayen Gohil, a country-risk analyst at BMI, a Fitch Solutions company.
The Banque Centrale du Congo still has room to maintain liquidity-management measures into twenty-twenty-six, which Gohil said will likely help the currency retain most of its gains.
The central bank injected fifty million dollars in August to absorb excess francs, triggering appreciation from the following month, according to the monetary authority.
“We’ll intervene like everywhere else in the world if we see that the volatility is too high,” Governor André Wameso told Bloomberg on December 4 during an interview in Washington. “But here at this point, there’s no reason to intervene in the market.”
Gohil noted that investor sentiment toward Congo will depend on more than currency movements.
“The main dynamics that investors will be focused on are high copper prices, which are currently surging and will continue to encourage investment in the mining sector, progress on the DRC-Rwanda peace deal, including the associated Regional Economic Integration Framework,” he said.
He added that projects such as the Lobito Corridor expected to significantly cut export times for Congolese metals, particularly to the United States will also shape investment decisions.
