At the end of its Monetary Policy Committee, held on July 22, the Bank of Central African States (BEAC) approved a program of one-off and targeted repurchases of government securities issued by the six member countries.
The overall envelope of the buyback program is set at six hundred billion CFA francs for the entire sub-region, of which 80% distributed equally among the members and the remaining 20% will be granted according to the economic weight of the States. . The maturity of government securities is set at a maximum of ten years, and the program is expected to last six months, with a possible extension of another six months as needed and depending on the economic outlook in 2021.
Indeed, the implementation of this operation is linked to the agreements concluded with the International Monetary Fund (IMF). “To benefit from this operation, the central bank asks the States, in particular the Public Treasuries, to revise and respect their schedules of issuance of public securities, in consultation with the specialists in securities of the Treasury of their respective networks, in coherence with the latest finance laws adopted in each country and the budgetary financing plans agreed within the framework of economic and financial programs with the IMF, ”said a press release from the central bank.
According to an expert familiar with the matter, the BEAC’s intervention complements the support that countries have already received from partners to fight against the coronavirus. “No idea on the basis on which the central bank has fixed the 600 billion CFA, but what is certain the countries need for the moment because of the economic and financial context which is gloomy”, adds this source.
In order to strengthen financing conditions in Central Africa, BEAC has decided to resume long-term liquidity injection operations, to offer credit institutions the stable resources necessary to cover their medium and long-term jobs. .
