(Business in Cameroon) – The Bank of Central African States (BEAC) announced a liquidity offer of 550 billion CFA francs to commercial banks on September 18, down from the record 600 billion CFA francs it had been offering since late August. This marks the first reduction in the central bank’s weekly liquidity injection since it began raising the ceiling to meet soaring demand.
The cutback comes after commercial banks demonstrated an inability to absorb the full 600 billion CFA franc amount, with their actual needs generally fluctuating between 400 and 500 billion CFA francs for several months.
This level of demand was reached following the BEAC’s decision in March to lower its tender interest rate (TIAO), the rate at which commercial banks refinance themselves with the central bank. The move ended more than two years of monetary tightening, during which the BEAC had raised the TIAO multiple times to restrict both access to its refinancing window and bank credit.
To meet the surge in demand after March, the BEAC had progressively raised its intervention ceiling from 200 billion to a historic 600 billion CFA francs for the region. Although the offer has been reduced since September 9, the 550 billion CFA franc liquidity injection still reflects significant activity in the credit market, particularly during a period when banks are distributing a high volume of student loans.
BRM
