(Business in Cameroon) – The Central Bank of Central African States (BEAC), the monetary authority for six CEMAC countries, has launched a new liquidity injection offer of CFA 90 billion to commercial banks across the region. The outcomes of this operation have not yet been disclosed.
This marks the third such operation initiated by the central bank since the beginning of June 2024, signaling a relaxation in the tight monetary policy implemented to combat inflation. Previously, these liquidity injections were suspended in February 2023.
The resumption of liquidity injections by the central bank coincides with increasingly optimistic inflation forecasts. Following the second Monetary Policy Committee session of 2024 held on June 24 in Yaoundé, BEAC now projects an inflation rate of 3.9% for the CEMAC region by the end of 2024. While still above the community norm of 3%, this forecast represents a decrease from the 5.6% rate recorded in 2023.
To potentially bring inflation within community norms, BEAC not only offered CFA 90 billion in liquidity injections to banks but also continued to withdraw funds from commercial bank reserves. On June 24, the central bank issued 14-day maturity bonds worth CFA 50 billion to commercial banks, offering a 2.5% return. Official reports indicate the operation was fully subscribed at 100%.
This alternating strategy of injecting and withdrawing liquidity appears aimed at not only combating inflation but also ensuring favorable conditions for economic growth financing. Economic growth in the CEMAC zone is projected to reach 3.3% in 2024, up from 2.3% in 2023.
