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Congo, Democratic Republic of: Financial Regulation Updates Emerge from IMF Review

Strengthening Financial Stability in Congo

In a move aimed at strengthening financial stability in Congo, the International Monetary Fund (IMF) has conducted a comprehensive review of the country’s financial sector. The review, which was carried out virtually between January 5-28, 2022, was requested by the Central Bank of Congo (BCC) and sought to assess the overall health of the financial system.

Key Vulnerabilities Identified

The IMF’s Financial Sector Stability Review (FSSR) identified five key vulnerabilities that require immediate attention:

  • Banking System Capital Base: Concerns over the quality of the banking system’s capital base
  • Non-Performing Loans: Difficulties in evaluating non-performing loans following COVID-19 relief measures
  • Financial Dollarization: Risks related to financial dollarization
  • De-Risking: Impact of “de-risking” on correspondent banking relationships
  • Intragroup Exposures: Bank subsidiaries in Congo placing surplus funds with parent companies abroad

Technical Assistance Roadmap

To address these vulnerabilities, the IMF has developed a draft Technical Assistance Roadmap aimed at strengthening the BCC’s capacity to regulate and supervise the financial sector.

Gender Inclusion in Financial Supervision

The review also marked a significant milestone by incorporating gender inclusion in financial supervision for the first time. This move is seen as crucial in promoting financial stability and inclusivity in Congo.

COVID-19 Exit Measures

In response to the review, the BCC has adopted COVID-19 exit measures, including specific reporting requirements, which are expected to provide momentum for additional technical assistance in the near term.

Findings and Recommendations

The IMF’s findings and recommendations aim to help the BCC analyze banks’ asset quality going forward and mitigate potential risks to the financial system.

Full Report Available

The full report of the review is available for free download on the IMF website.