(Business in Cameroon) - In the June 19-23, 2023 business week, Cameroon paid a total of 23.3 billion CFA Francs on the regional central bank BEAC’s public securities market.
According to the weekly operation report just published by the central bank, the country paid 2.092 billion CFA Francs as interest coupon on an outstanding 6-year bond and 1.152 billion CFA Francs for interest on another 7-year bond. Cameroon also paid 20 billion CFA Francs in principals for maturing 26-week bills.
The same week, Cameroon also issued 13-week bills in a bid to raise 15 billion CFA Francs on the same market. However, according to data published by the central bank, it raised just 5 billion, or 36.6% of the amount sought.
This new operation reflects the difficulties that Cameroon and many other CEMAC countries have been experiencing since the beginning of 2023 in mobilizing financing on the Beac public securities market. The difficulties stem from the restrictive monetary policies applied by the central bank to curb inflation. Those policies aim to dry liquidity by raising key rates, stepping up liquidity absorptions, and suspending liquidity injections among other things.
The policies boosted the cost of borrowing, making investors more inclined to lend to parties paying high coupons.