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CEMAC: Foreign reserves rose 3.2% MoM in May 2021 due to strict application of new foreign exchange rules, BEAC says

CEMAC: Foreign reserves rose 3.2% MoM in May 2021 due to strict application of new foreign exchange rules, BEAC says
  • Comments   -   Monday, 12 July 2021 16:41

(Business in Cameroon) - As of May 31, 2021, CEMAC countries’ foreign reserves was XAF4,137 billion, down from XAF4,951 billion at end May 2020. Despite this year-on-year drop, the June 2021 report of the Bank of Central African States (BEAC)’s monetary policy committee explains that month on month, the reserve has grown by XAF129 billion or 3.2%.

For the BEAC, this month-on-month growth was due to the strict application of the new foreign exchange regulation in force in the community space. “This evolution is the result of the net positive situation of transfers (119 billion) during the month under review because of a drop in outgoing transfers,” the BEAC wrote.

Since the new foreign exchange the BEAC is claiming to be the reason for such month on month improvement became effective, economic operators have been complaining of not being able to pay their foreign suppliers.  In recent months, those complaints have become more pressing because the BEAC now requires documentary proof of past foreign exchange transactions should be provided before new wire transfer requests are approved.

Although the requirement was consolidating foreign exchange reserves, it was affecting businesses. After several complaints and pressures, the BEAC had to suspend the provision according to which wire transfer requests would be rejected if all the old documentary proofs justifying the aim of former transfers are not submitted.

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