“Devastating” impact of fiscal policies

Government enforcement of monetary measures announced in mid-September have had a “devastating impact” on businesses, the latest report from the Office of the UN Humanitarian Coordinator for the DRC said. Under the new measures, the official exchange rate is applied for all transactions, the use of foreign currency is restricted and foreign businessmen are to provide a US $500,000 guarantee by the end of this year. Significant business closures and expatriate departures have contributed to a further shrinking of the local economy, the report said. The current official rate of 4.9 Congolese francs to one US dollar represented about 30 percent of the franc’s market value, the report said. The relief community is “facing serious difficulties” because the monetary policies have resulted in a “three-fold increase in expenditures” for project activities, it said. Negotiations with the authorities have not resulted in any viable solutions thus far, it added.