Bauxite, gold and a dependent exchange rate

Guinea is among the world's largest exporters of bauxite, the main ore for aluminium, and also exports gold, so its currency, reserves and growth depend largely on the mining sector and on demand from China, the main buyer. The Banque Centrale de la République de Guinée runs a managed float for the Guinean franc, which has weakened steadily over the decades as inflation, often in the double digits, exceeded that of Guinea's trading partners. The 2014 Ebola outbreak hit output and the exchange rate, and a September 2021 coup and then sanctions and the pandemic created new strains, although mining exports held up. Mining revenue accrues in dollars to a few firms, which means improvement in the national accounts does not always translate into broad gains in living standards, and the central bank has repeatedly sought to boost reserves to protect against shocks.