De-dollarization in the Democratic Republic of Congo: A 25-Year Retrospective and a 25-Year Prospective on Usage, Market Depth, and Monetary Credibility

This paper investigates the dynamics of de-dollarization in the Democratic Republic of Congo (DRC), exploiting the 2024 monetary reforms as quasi-exogenous shocks observable in both regulatory texts and payment practices. Three key findings stand out. First, by opening the “black box” of payments—POS, ATS, and mobile money—we provide evidence of increased use of the Congolese franc and incipient substitution away from foreign currency deposits. Second, econometric tests (event studies, difference-in-differences, local projections) identify a sharp break in price transmission: exchange rate pass-through to inflation declines significantly from the second quarter of 2024. Third, forward-looking simulations (2025–2050) demonstrate that only strict and sustained reform execution, combined with deepening domestic financial markets (yield curve in CDF, collateral, Treasury securities), can achieve a durable reduction in dollarization (−9.5 percentage points) and a contraction in pass-through of nearly 40%. These findings underscore that de-dollarization is not decreed but built: through repeated and credible usage of the national currency, anchored in market depth and institutional credibility. Beyond the Congolese case, this study contributes to global debates on dollarized regimes, providing new insights into how resource-rich emerging economies can reconstruct monetary credibility and restore effective policy transmission.