(Business in Cameroon) - Between April 8 and April 22, 2024, the Bank of Central African States (BEAC) plans to initiate three bond issuance operations, aiming to withdraw a total of CFA150 billion from Cemac banks. Each operation aims to raise CFA50 billion, the first of which occurred on April 8 and involved 28-day bonds with a nominal interest rate of 3.5%. The results of this operation are still awaited.

The subsequent issuances, scheduled for April 15 and April 22, 2024, will offer 14-day maturity bonds at a 2.5% interest rate.

These new operations mark the central bank's third series of BEAC bond issuances. This strategy is the central bank's latest tool to absorb bank liquidity, thereby combating monetary inflation (20%), particularly by restricting access to bank financing. The initial two series of these operations were met with reluctance from banks, indicating a prevailing liquidity need in the sub-regional banking sector.

While the first series of issuances was unsuccessful due to a lack of subscriptions, the second series only achieved a coverage rate of about 30%. BEAC Governor Yvon Sana Bangui attributes the banks' lack of interest to overly stringent eligibility criteria. He has not ruled out the possibility of revising these conditions to make BEAC-issued securities more attractive to commercial banks.

To participate in these operations, which involve selling liquidity to the central bank in return for interest, banks are required to abstain from seeking BEAC facilities during the maturity period of the issued instrument. Additionally, they must acknowledge that BEAC bonds are not eligible for central bank refinancing. These stringent criteria deter CEMAC banks, which remain keen on continuing to finance the sub-regional economy despite the central bank's restrictive monetary policy.