Impact of Interest Rate Hikes on the Economy in the Republic Democratic Party of the Congo

Abstract

Interest rate policy is one of the main instruments used by a central bank to ensure price stability and preserve macroeconomic equilibrium. In the Democratic Republic of Congo (DRC), the significant increase in the Central Bank of Congo's (BCC) key interest rate starting in 2023 is taking place against a backdrop of strong inflationary pressures, the depreciation of the Congolese franc, increased liquidity in the national currency, and macroeconomic imbalances exacerbated by security and budgetary challenges. The key interest rate, maintained at 25% after its 1,400 basis point increase in August 2023, has contributed to the tightening of monetary conditions. (IMF) This restrictive policy has allowed for a gradual reduction of inflationary pressures. Annual inflation, which reached 23.8% at the end of 2023, fell to 11.7% at the end of 2024, then to 7.8% in September 2025 before dropping to 2.5% in October 2025. This development then allowed the BCC to initiate a cycle of monetary easing.