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CEMAC: Interbank transactions up by XAF44 bln MoM in June 2019

CEMAC: Interbank transactions up by XAF44 bln MoM in June 2019
  • Comments   -   Tuesday, 26 November 2019 14:51

(Business in Cameroon) - In June 2019, transactions on the BEAC (central bank of the CEMAC region) interbank market, peaked at XAF317 billion, an official report indicates. 

According to data compiled in the same report, these transactions have increased by XAF44 billion month-over-month since in May 2019 they were only XAF273 billion.

According to BEAC analysts, this trust between banks, which are increasingly financing one another, can be explained by the reforms implemented in recent years, the launch of the repo mechanisms namely.

According to financial experts, this financing technique is characterized by an exchange of marketable securities for cash for a specified period of time. This transaction requires the signature of a master agreement between the parties.

Better still, the Central Bank explains, the repo mechanism allows a lender to automatically transfer ownership of the collateral provided by the borrower once the repayment date has expired. This comforts lending banks into loaning to their peers seeking liquidity.

Brice R. Mbodiam

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