FIGHT AGAINST INFLATION : BEAC to withdraw XAF 150 billion from banks
[abelainfo] - In order to reduce inflation by draining bank liquidity, the Central Bank of Central African States has launched its fourth round of bond issuance. This operation will take place with commercial banks in the CEMAC zone over the next two weeks.
On April 29, 2024, the Central Bank of Central African States (BEAC) launched its fourth round of bond issuance in order to drain bank liquidity and fight against inflation. To achieve this, through three bond issuances by the BEAC, scheduled between April 29 and May 13, 2024, the central bank of the CEMAC countries (Cameroon, Congo, Gabon, Equatorial Guinea, Chad, and CAR) aims to withdraw a total of XAF 150 billion from the vaults of commercial banks.
The first three series of bond issuances had rather mixed success. Out of seven operations, at least two were declared unsuccessful due to lack of subscriptions, while practically all the others had demand coverage rates barely exceeding 30%. Since the launch of these operations in February 2024, only the one on April 22, 2024, with an amount of XAF 50 billion, achieved resounding success. With a rush by banks to this offer, it recorded a demand coverage rate expressed by the central bank of 156%.
As a reminder, after the increase in benchmark interest rates, the suspension of liquidity injection operations, and the intensification of weekly liquidity withdrawal operations, BEAC bonds are the new weapon of the central bank to try to drain banks and restrict access to credit. This is done with the aim of reducing the share of inflation of monetary origin in the CEMAC zone by 20%.
Sorelle Ninguem
