Despite global uncertainties: BEAC pledges to guarantee stability.

 Abbas Mahamat gave the assurance yesterday. He was speaking during a press conference at the end of the Second Ordinary Session of the Monetary Policy Committee of BEAC. The meeting, just like the press conference, was held via videoconferencing.

 Clarifying details of where economies of the Central African Economic and Monetary Community, CEMAC, are, vis-a-vis micro and macroeconomic shifts, the Governor said stakeholders must work together to exploit opportunities within the current context of global challenges.

 The BEAC Governor addressed the press across CEMAC member countries, stating that, it is imperative for citizens to get updates on market shifts to better shape their engagements. Amid an inflation rate that continues to threaten the purchasing power of citizens, the CEMAC Central Bank Governor said work remains in progress to get the best for the sub region.

He underscored that during yesterday’s session, members assessed recent economic developments from a macroeconomic perspective, both at the level of CEMAC and internationally.  Abbas Mahamat cited the outlook of the global economy for 2023, which the International Monetary Fund, IMF, issued in the month of April, predicting a drop in growth, as telling of complexities facing the world.

 In the said report, the IMF had projected growth to decline from 3.4 percent in 2022 to 2.8 percent in 2022. The IMF had also projected a global decline in fuel and non-oil commodities prizes, capping inflation at 7 percent, compared to 8.7 percent in 2022. 

Within CEMAC, he noted that inflation has risen to 6.1 percent in 2023, compared to 5.6 percent in 2022. Added to this, Abbas Mahamat said the sub-region is experiencing a decline in growth from 3.0 percent in 2022 to 2.4 percent this year.  Added to this, he cited declining public sector finances, reduction in grants from 2.8 percent of the Gross Domestic Product, GDP in 2022 to 1.7percent in 2023; fall in account balance ratio to 0.1 percent this year unlike 7.7 percent in 2022 as factors that demand extra caution

Despite this difficult international situation, Abbas Mahamat sounded positive that, the foreign exchange reserve of the sub-region remains favourable with a positive monetary stability.

The FCFA currency's external coverage rate, Abbas Mahamat said, has risen from 73.1 percent in December 2022 to 80% percent in 2023. Foreign exchange reserves to guarantee the importation of goods and services across the sub-region, he also said, has remained on the rise. Liquidity supply, he also said, is expected to expand by 13.1 percent.  Beyond these, there are also net foreign assets, which the Central Bank   Governor stated, is projected to remain at a growth rate of 20 percent throughout the year.

He stated that, the Monetary Police Committee after analysing the disturbing situation internally and the positive external look of the currency, decided to maintain the Tender Interest Rate at five percent. The interest rate was also maintained at 6.75 percent and deposit facility rate at zero percent.  The minimum reserve ratio was also left unchanged at seven percent while that on term liabilities was also retained at 4.50 percent.

 The Governor charged member states to boost the agricultural sector to increase local production as a way of reaping from the threats which the Russia-Ukraine war is posing to economies of the sub-region.