The Bank of Central African States (BEAC) has announced that it will not intervene on the money market for its main operation from March 26 to April 2, 2020. Reason given, the health crisis due to the pandemic COVID-19. “In order to better appreciate the effects of the current health crisis linked to the COVID-19 pandemic on the liquidity of the CEMAC banking system, the BEAC does not intervene on the money market as its main operation over the period going from March 26 to April 2, 2020, ”reads Wednesday, March 25 on the bank’s website.
However, underlines the Central Bank of the CEMAC zone, credit institutions in need of financing will be able to satisfy their demands on the counter of the marginal loan facility on the usual conditions.
Here are the rates:
Interest rate on calls for tenders (TIAO): 3.5%
Marginal loan facility rate (TFPM): 6%
Weighted average interbank rate (TIMP): 3.56%
TIMP-TIAO spread: 0.06%
TIMP-TFPM spread: -2.44%
Note that the BEAC intervenes on the money market to influence the conditions, through operations of injection or recovery of liquidity at weekly frequency, fine-tuning operations, injection operations and additional liquidity draining long maturities (1,3,6,9 and 12 months), structural operations of (temporary or firm purchase / sale of securities and issue of BEAC vouchers), permanent facilities (loans and deposits) and intraday advances.
This decision comes a few days after the Association of Professionals of Credit Institutions in Cameroon (Apeccam) asked the BEAC to postpone its decision to reduce liquidity in the banking system. A measure that was taken by the Money Market Committee during its February 2020 session.
Apeccam agreed that the BEAC should rather facilitate banks’ access to the money market by lowering interest rates and increasing refinancing ceilings in the event of liquidity pressure.