Congo central bank cuts interest rate to 10.5%

It had hiked the interest rate from 7.5% to 18.5% last August to re-anchor inflation expectations. International Monetary Fund data released this week forecasts Congo's gross domestic product (GDP) for 2021 at 6%, up from a previous central bank forecast of 3.2%.

Democratic Republic of Congo's central bank slashed its benchmark interest rate on Friday to 10.5% from 15.5%, an advisor to the bank's governor said, in a second successive large rate cut.

The advisor, Plante Kibadhi, did not explain the bank's rationale in a tweet announcing the decision. It lowered the rate to 15.5% from 18.5% last month on the back of a more positive economic outlook and a forecast slowing of inflation. It had hiked the interest rate from 7.5% to 18.5% last August to re-anchor inflation expectations.

International Monetary Fund data released this week forecasts Congo's gross domestic product (GDP) for 2021 at 6%, up from a previous central bank forecast of 3.2%. GDP grew by just 0.8% last year because of the COVID-19 pandemic. Growth is forecast at 4.4% in 2022, the IMF said. Congo is Africa's top producer of copper and recorded record output of the metal last year.