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Yaoundé - 24 October 2021 -
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CEMAC: BEAC launches another liquidity withdrawing operation to combat inflation

CEMAC: BEAC launches another liquidity withdrawing operation to combat inflation
  • Comments   -   Tuesday, 21 September 2021 13:37

(Business in Cameroon) - Today September 21, 2021, in the CEMAC region, the Central bank BEAC launched an operation aimed at withdrawing liquidity from the regional financial system.  

According to the central bank, the credit institutions concerned by this operation are those qualified as capital providers on the money market and those that have not requested refinancing from the BEAC in the twelve months before the operations.

Through this operation, the BEAC intends to withdraw XAF100 billion of liquidity from commercial banks with excess liquidity, an official release informs. According to experts, when a bank has excess liquidity it could inject more money than it should into the economic circuit, therefore, facilitating inflationary pressures.

The liquidity absorption operations were suspended in March 2020 and replaced by liquidity injections to support the CEMAC banking system and boost financing to economies amid the coronavirus pandemic. This resumption of liquidity absorption operations indicates that the coronavirus pandemic’s impacts on CEMAC economies are easing. Even an economic recovery is forecasted for 2021 after the recession recorded in 2020.

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