(Adds inflation, background)
KINSHASA, Sept 29 Democratic Republic of Congo's
central bank has raised the main interest rate from 2 to 7
percent in a bid to contain quickening inflation, the bank said
on Thursday, as low commodity prices continue to batter the
economy of Africa's top copper producer.
Congo's government slashed its 2016 budget in June by 22
percent due to falling revenues from the mining and oil sectors,
which account for some 95 percent of export earnings. It has
also cut its growth estimate from 9 to 4.3 percent.
In Thursday's statement, the bank increased its year-end
inflation forecast to 4.13 percent, up from less than 1 percent
The jump is largely due to exchange rate pressures caused by
a shortage of dollars in the economy. Foreign exchange reserves
have fallen by about a third this year to under $1 billion,
enough to cover less than four-and-a-half weeks of imports.
The bank will also intervene in the foreign exchange market
on Friday to ease pressure on the central African nation's franc
currency, spokesman Plante Kibadhi told Reuters.
The Congolese franc has depreciated more than 20 percent
against the dollar this year on the parallel market.
(Reporting by Aaron Ross; Editing by Joe Bavier)