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Yaoundé - 08 December 2022 -
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BEAC raises key rates again in an attempt to curb inflation

BEAC raises key rates again in an attempt to curb inflation
  • Comments   -   Tuesday, 27 September 2022 11:40

(Business in Cameroon) - Following the 3rd 2022 meeting of its Monetary Policy Committee (MPC) held yesterday in Yaoundé, the Bank of Central African States Beac announced it has once again increased its two benchmark rates.

The Tender Interest Rate (TIAO), which represents the remuneration it receives for providing liquidity to commercial banks, was increased from 4% to 4.5% (up o.5 points) while the Marginal Lending Rate was raised from 5.75% to 6.25%, also up 0.5 points. This rate is the remuneration Beac obtains when it provides liquidity to commercial banks, for a period not exceeding 24 hours.

Like the first time it raised its key rates in 2022, the central bank seeks through this second move to make liquidity more expensive for commercial banks, thus increasing the cost of bank credit and making it less accessible. Subsequently, money creation will drop within the region and inflation will slow down.

The Monetary Policy Committee forecasts inflation to be 5.2% by the end of the year (from 4.2% at the end of September 2022), or 2.2% higher than the tolerance threshold of 3% accepted in the region.

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