Dr Bationo is also the Director General of Economy and Money at la  Bceao. Interest rate policy, in addition to its contribution to the mobilisation of savings, contributes to the optimal allocation of financial resources within the Union.

1- The minimum tender submission rate

This is a refinancing rate representing the interest rate on liquidity borrowed by commercial banks from the Central Bank. The tender rate is the main tool of monetary policy to influence the volume of credit dedicated to the economy.

Indeed, commercial banks that wish to increase their loans to businesses, public administration and households become borrowers at the interest rates of tenders.

They in turn lend to their customers at a higher rate than their borrowing from the central bank.

According to data from la  Bceao, commercial banks in Umoa Member States borrowed at this minimum interest rate 6.027 billion FCfa from the Central Bank as of June 02, 2020.

2- The marginal loan rate (reverse repurchase agreement rate)

This is the interest rate at which commercial banks borrow cash by providing collateral for receivables (government securities, commercial paper, etc.) that they hold.

The change in the marginal lending rate influences the credit supply of commercial banks and the demand for credit of their customers, thus affecting the mass (amount of money put into circulation in an economy by a central bank).

It should be clarified that money is provided to banks at this counter at their initiative when they have difficulties. As of 02 June 2020, no commercial bank has used this counter.

According to Faseg economics professor Malick Sané, key rates regulate economic activity in monetary policy by controlling the amount of money available in the economy.

He explains that the Central Bank may seek to bend the market rate in the direction that suits it through interventions, discretionary or without intermediary.

Monetary policy is one of the instruments of cyclical economic policy alongside fiscal and fiscal policy and exchange rate policy. The main actor in monetary policy is undoubtedly the Central Bank, which is entrusted with the role of regulator of the money markets.

Prof. Sané indicates that through all its interventions, the Central Bank has a good control of interbank market rates whose vocation is short- and medium-term refinancing.

The large day-to-day segment of operations is made necessary by the highly fluctuating daily evolution of the cash flow of many credit institutions. Therefore, the Central Bank steers the economy in the desired direction through the handling of key rates.