DR Congo Announces Ban on US Dollar Cash Transactions from 2027
The Central Bank of the Congo has declared a significant monetary policy shift, announcing plans to prohibit cash transactions in foreign currencies, including the US dollar, effective April 9, 2027. This directive marks a fresh attempt by the Congolese government to strengthen the local currency, the Congolese franc, and reduce dollarisation in the economy.
Details of the New Foreign Currency Policy
In a statement released on Thursday, April 9, 2026, the central bank outlined that the ban will apply specifically to cash transactions involving foreign currencies. However, electronic payments in foreign currencies through the banking system will still be permitted. This policy is designed to enhance financial oversight and support ongoing efforts to combat money laundering and terrorist financing risks.
Governor Andre Wameso explained the rationale behind the move, stating, "Foreign currencies have gradually overtaken the use of the weak local Congo franc in recent years in stores and other places. The Congo Central Bank has tried and failed in the past to ban the use of the dollar." He emphasized that this new approach aims to address the persistent dominance of the US dollar in everyday transactions.
Background on Dollar Dominance in Congo
The US dollar has become increasingly prevalent in the Democratic Republic of the Congo's economy, largely due to low public confidence in the Congolese franc. This trend began in the 1990s during a period of hyperinflation, when inflation rates soared to approximately 2,000%. Today, most transactions above $5 are conducted in dollars, and the local currency trades at about 2,300 francs to the dollar, a significant depreciation from around 920 francs in 2010.
Authorities have previously attempted to curb dollarisation, such as a 2024 directive requiring banks and financial institutions to configure payment terminals to accept only the Congolese franc. Despite these efforts, trust in the local currency has remained weak, prompting this more stringent measure.
Tanzania's Similar Anti-Dollarisation Move
The Congo's policy follows a similar initiative recently implemented by the Bank of Tanzania, which outlawed the use of foreign currencies for domestic payments. Under Tanzania's regulation, all goods and services must be priced and paid for strictly in Tanzanian shillings. It is now an offence to quote or accept payments in foreign currencies or refuse payments made in the local currency.
Foreigners, including tourists, are required to exchange their money through commercial banks or licensed bureau de change operators, although digital payments using bank cards are still allowed. This parallel action highlights a broader regional trend towards reducing reliance on foreign currencies in African economies.
Challenges and Implications for the Congolese Economy
The ban on cash transactions in foreign currencies presents both opportunities and challenges for the Democratic Republic of the Congo. On one hand, it could help stabilize the Congolese franc and promote its use in daily transactions, potentially boosting economic sovereignty. On the other hand, it may face resistance from a public accustomed to using dollars for larger purchases and as a hedge against inflation.
Key points to consider include:
- The policy's effectiveness in curbing dollarisation will depend on public acceptance and trust in the local currency.
- Electronic foreign currency payments may continue to facilitate international trade and investment.
- This move could influence other African nations grappling with similar currency issues.
As the 2027 implementation date approaches, the Central Bank of the Congo will likely need to engage in extensive public education campaigns and ensure robust banking infrastructure to support the transition. This policy represents a critical step in the country's ongoing efforts to strengthen its financial system and reduce external currency dependencies.
