Analysis of the effect of nominal exchange rate dynamics on non-mining economic activity in the Democratic Republic of Congo: a discrete threshold regression analysis[Évaluation de l'effet de la dynamique du taux de change nominal sur l'activité économique non minière en République démocratique du Congo : une analyse par régression à seuil discret]

This paper examines the non-linear relationship between nominal exchange rate movements and non-mining GDP growth in the Democratic Republic of Congo (DRC) over the period 2014Q2–2026Q1. By applying a discrete threshold regression model—following Hansen (2000) —to 48 quarterly observations, this study identifies two structural thresholds in the exchange rate-growth nexus and demonstrates that, in a highly dollarized economy with high dependence on international trade and whose exports of strategic minerals are price inelastic, the nominal appreciation of the currency exerts a positive, statistically significant, and economically substantial effect on non-mining activity. This result challenges the conventional narrative that monetary appreciation poses a risk to growth and invites us to rethink exchange rate management in economies rich in natural resources and highly dollarized. The model achieves an adjusted R² of 0.871 with high overall significance (F = 27.45; p < 0.001), and the threshold estimates are consistent with recent operational experience of the BCC.