(Business in Cameroon) - The BEAC will stop, for one week (April 2 to 26), its liquidity-absorbing operations in the CEMAC region, according to a statement signed, on March 24, by Abbas Mahamat Tolli (photo), Governor of the central bank.
According to the governor, this is a precautionary measure that will let the Beac "better appreciate the impacts of the current covid-19 health crisis on the liquidity in the CEMAC banking system."
The liquidity-absorbing operation was decided at the February 2020 ordinary session of the central bank’s Money Market Committee. By suspending the operation, it is thus heeding part of the grievance expressed on March 20, by Apeccam, the association of credit institutions operating in Cameroon.
"The Beac should temporarily stop the decision to reduce liquidity in the banking system, which was taken by the Money Market Committee at its February 2020 session. It must instead consider facilitating banks' access to the money market by lowering its interest rates and increasing refinancing ceilings in case of liquidity pressure," the Apeccam suggested because of the global Coronavirus pandemic.
The Beac will no longer refinance banks on preferential terms. Moreover, says Abbas Mahamat Tolli, credit institutions in need of financing will have to request it on the marginal lending facility window at the usual conditions (3.5% for the tender interest rate, 6% for the marginal lending facility rate, 3.56% for the weighted interbank rate).