APAnews | The Board of Directors of the Bank of Central African States (BEAC) has taken note of the regional bank’s commitment to “apply a properly calibrated monetary policy aimed mainly at restoring a satisfactory level of foreign exchange reserves.”
In a statement seen by APA on Thursday, following its session on June 24, 2019, the Board urged the Central Bank to continue the implementation of liquidity management mechanisms, with the dual objective of improving the transmission of the monetary policy and preventing inflationary pressures.
At the same time, the Board of Directors encouraged the banking supervisory body to research and apply practical solutions to speed up the resolution process of banks in trouble.
In the Economic and Monetary Community of Central Africa (CEMAC), monetary policy, considered expansionist by specialists, was translated a few years ago by an economic shock coupled with a rise in state spending.
The foreign exchange reserves of the zone thus fell, according to consistent data, from US$15.5 billion in December 2014 to US$4.9 billion at the end of 2016, barely covering 2.3 months of imports.
In order to curb deficits, the fall of which, since 2014, commodity prices is also one of the causes, the International Monetary Fund (IMF) has concluded three-year economic reform programs with Cameroon, Gabon and the Central African Republic, while the Congo and Equatorial Guinea still seem to be dragging their feet.
The extraordinary summit of CEMAC Heads of State, held in December 2016 in Yaoundé, Cameroon had among other things, prescribed the raising of the central bank’s key interest rate, strengthening banking supervision, restricting bank refinancing with government securities as collateral, but also modernize liquidity management.