Kinshasa, Democratic Republic of Congo - Trying to stop the economy's perilous slide, the government has reversed a decree outlawing the use of foreign currencies in Congo, the Central Bank said on Wednesday.

It will now be possible to buy and sell using national or foreign currencies in designated free exchange zones, including commercial centres and mining areas, the bank said in a statement. No reason was given for the decision.

President Laurent Kabila's government outlawed foreign currencies last year in a desperate bid to stabilize an economy shattered by war, corruption and mismanagement. Violators risked the death penalty.

The government also routinely issues decrees fixing the prices of everything from cooking oil to precious gems.

But such measures have only added to the country's economic spiral, scaring off foreign investors and leaving hard currencies in short supply.

Congo was ruined by decades of government neglect and corruption under the late dictator Mobutu Sese Seko, who became one of the world's richest men by plundering the vast mineral wealth of the country then known as Zaire.

The country's problems have accelerated since August 1998, when rebels took up arms in the east to oust Kabila, who toppled Mobutu in 1997.

Citing concerns about security along their borders with Congo, Rwanda and Uganda backed the rebels. Kabila has the support of Angola, Zimbabwe and Namibia.

All the key factions signed a cease-fire agreement last year in Lusaka, Zambia, but fighting has continued - particularly in the eastern part of the country. - Sapa-AP