(Business in Cameroon) – The Bank of Central African States (BEAC) issued a CFA185 billion liquidity offer on July 23, which credit institutions oversubscribed by 267%. This means that while the BEAC’s offer targeted CFA185 billion in liquidity, banks collectively expressed a need for CFA494.7 billion. The day before, on July 22, a BEAC bond issuance targeting CFA50 billion from the banks’ reserves was declared unsuccessful due to a lack of subscriptions, as revealed by the central bank.
The contrasting outcomes of these two banking operations highlight a significant liquidity need within the CEMAC system, following several months of tight monetary policy by the central bank. This policy included progressively increasing key interest rates to make refinancing from the BEAC more expensive for commercial banks. Additionally, the suspension of liquidity injections, intensified liquidity withdrawals, and BEAC bond issuances further tightened the banking conditions.
According to the central bank, these measures aimed to restrict access to financing for economic agents as part of the effort to combat inflation, which was estimated to be 20% monetarily driven. However, since June 2024, as inflationary pressures eased, the central bank has also eased its grip on banks by resuming liquidity injections into the banking system—a move that has been met with high demand.
