The Bank of Central African States BEAC has announced it will infuse 500 billion FCFA to boost the banking sector in particular. The Monetary Policy Committee of the institution who reached the decision further said the amount could be increased should the need arises.
This is the main fallout of a meeting held to find solutions to the sub region’s economy hit by the Covid-19 pandemic. Other easy measures include, easing the conditions for the issuance of public securities on the BEAC market and negotiating with competent authorities to obtain a one-year rescheduling of the repayment of the Central Bank’s consolidated credits to the States. This measure will loosen the debt stranglehold on the treasury of CEMAC countries, which will thus have more liquidity to fund the crusade against the Coronavirus.
BEAC announced it has triggered some levers to favor the financing of member states and commercial banks of the region. In turn, those states and banks will have to support the companies whose activities have been affected by the health crisis.
First, CEMAC’s central bank lowered two of its key rates. The tender rate was lowered by 25 basis points (from 3.5 to 3.25%) while the marginal lending rate went from 6 to 5%.
Also, the various types of collaterals admitted by the central bank as a guarantee for refinancing operations have been extended. Coupled with the lowered key rates, that extension provides more flexible latitude to commercial banks during their search for liquidity in the money market. Also, the various types of collaterals admitted by the central bank as a guarantee for refinancing operations have been extended. Coupled with the lowered key rates, that extension provides more flexible latitude to commercial banks during their search for liquidity in the money market.
BEAC hopes that the banks will use the liquidity to fund CEMAC economies by granting credits to companies and individuals and even states at adjusted rates.
Ministers of Finance and Economy of CEMAC have also agreed to postpone the implementation of any new corporate taxation measures till 2021. “These urgent support measures should be both fiscal (tax relief and moratorium allowances for the payment of taxes and certain social security charges) and budgetary (subsidies to companies to avoid bankruptcy and closures, as well as job losses). To this end, it was agreed that the States must postpone any new tax measures until 2021,” they agreed.
