BEAC : Institution Maintains Key Policy Rates
The Bank of Central African States (BEAC) has opted to renew its key policy interest rate. This follows the BEAC’s Monetary Policy Committee (MPC) second ordinary session held on June 26th.
Thus, the tender rate (TIAO), which is the rate at which the BEAC provides liquidity to commercial banks, has been maintained at 5 % since its revaluation last March. Likewise, the marginal lending facility rate, which is the rate at which central banks pay to borrow liquidity for a period of 24 hours, is still set at 6.75 %.
This decision to keep key interest rates unchanged follows a stable external position, but a still worrying situation of internal stability, indicates Abbas Mahamat Tolli, President of the CPM.
According to the CPM’s projections, it is envisaged an external currency coverage rate of 80 % against 73.1 % in December 2022, and foreign exchange reserves in months of imports of goods and services which would increase to 5.1 at the end of 2023 against 4.7 in 2022. The money supply would grow by 13.1 % while net foreign assets would continue to increase at a rate of about 20 % in 2023.
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According to the forecasts of the institute for monetary issuance, the inflation rate in the CEMAC zone is announced at 6.1 % at the end of 2023 against 5.6 % in 2022. Growth will slow down in 2023, returning from 3.4% in 2022 to 2.8 % at the end of the current financial year.
We recall that at the end of the first ordinary session of the Monetary Policy Committee (CPM) of the year 2023, held on March 27, in Yaoundé, the central bank had for the 4th time revised up its main key interest rates since December 2021.
This monetary policy aims to contain inflation which is projected at 6.4 % in 2023 according to the forecasts of the central bank. A rate well above the Community standard of 3 %. This unprecedented inflation is blamed on the ongoing Russo-Ukrainian war, affecting the world’s economy at large.
Sorelle Ninguem
