(Business in Cameroon) – The issuance of bonds by the Bank of Central African States (BEAC) on April 29 was declared unsuccessful due to a lack of subscriptions, the central bank announced in an official statement published the same day. Through this 28-day maturity bond issuance, BEAC had hoped to raise 50 billion CFA francs from commercial banks’ coffers as part of its strategy to tighten access to financing and combat inflation.
This is not the first time one of these central bank liquidity-draining operations has been declared unsuccessful. Except for a single successful operation, all others conducted since February 2024 have failed to attract subscribers, despite offering yields of 2.5% and 3.5% for 28-day and 14-day maturity bonds, respectively.
When questioned in March 2024 about the lack of interest from commercial banks (known to be flush with liquidity) in the BEAC bond offerings, the governor of the central bank, Yvon Sana Bangui, had cited the eligibility criteria for these central bank operations as a probable obstacle. He had also mentioned the possibility of revising these eligibility criteria to attract more banks to BEAC bond issuances.
To recall, after raising key interest rates, suspending liquidity injection operations, and intensifying weekly liquidity withdrawal operations, BEAC bonds are the central bank’s new weapon to try to dry up banks and restrict access to credit. This is with the aim of reducing the share of monetary inflation (20%) in the CEMAC zone.
