Central Africa: BEAC maintains policy rates and forecasts solid foreign exchange reserves
The BEAC, Central Bank of CEMAC (Cameroon, Gabon, Chad, CAR, Equatorial Guinea, Congo), decided to maintain its key rates at its meeting on September 25. The TIAO, its main refinancing rate, remains at 5%, as does the marginal lending facility rate for short-term bank loans, which remains at 6.75%.
This unanimous decision stems from a positive economic outlook, a strong external position and persistent inflation, according to Abbas Mahamat Tolli, CPM President and BEAC Governor.
This decision marks the second consecutive time that the BEAC has maintained its refinancing rates, after a series of increases started in November 2021 to counter inflation.
The shift towards a more accommodative monetary policy reflects the institution’s growing concern about the risks of excessive rate hikes. Regional GDP growth is forecast to fall slightly from 2.8% in 2022 to 2.5% this year, while inflation is expected to reach 5.7% by the end of the year, although still above the EU threshold of 3%.
The BEAC aims to ensure price stability while supporting the economic recovery. Moreover, it plans to significantly increase its foreign exchange reserves, reaching 7,850.8 billion CFA francs by the end of the year, which is equivalent to an external cover rate of 78.5% and 5.23 months of imports of goods and services.
This increase is due to higher revenues in the extractive sector, in particular due to the rise in crude oil prices on international markets, and the obligation for oil and mining companies to repatriate 35% of their export earnings to the region.
