(Business in Cameroon) - The Bank of Central African States (Beac) welcomes the positive effects of its new operational framework for the monetary policy within the CEMAC zone. In a memo published September 24, the bank indicated that the innovations established this year cover various areas including the money market intervention instruments and procedures, methodologies for setting intervention volumes, minimum reserves, as well as data collection, analysis and animation system of the money market by the Central Bank, etc.

“The overhaul of Beac's intervention instruments entailed a greater consistency between them and a better consideration of the various liquidity issues, in particular through the modernization of the main refinancing operation, the introduction of fine-tuning operations, standing facilities (loans and deposits), operations with longer maturity periods (1, 3, 6, 9 and 12 months) and finally, structural operations (temporary or firm purchases/sales of securities and Beac Bonds issuance),” the note stated.

Moreover, the bank said that the main liquidity injection operation, since 11 June 2018 when the new operational framework entered into force, is now conducted through a multiple rate tender. Therefore, unlike fixed-rate tenders previously conducted under the national refinancing objectives, the multiple rate tender has the advantage of encouraging credit institutions to boost their cash management. Since the proposed weekly volume can be modified from one week to the next, this approach is more demanding in terms of liquidity forecasts.

“By making market actors more responsive to monetary policy guidelines, this approach should make it possible to recycle idle resources between the guidelines and contribute to the interbank market’s development,” Beac pointed out.

Sylvain Andzongo