The Governor of the Bceao, Tiémoko Meyliet Koné

The Central Bank of West African States (BCEAO) announced in a press release the reduction of its < a href="https://www.koaci.com/recherche?search=directeurs"> directors (see full press release in associated article, editor's note).

The decision was taken by the Monetary Policy Committee (MPC) of the Central Bank of West African States (EWAC) which met on Monday, June 22, 2020, under the chairmanship of the Governor of the Central Bank, Tiémoko Meyliet Koné, its Statutory President.

Due to the current health context, and in order to strengthen its support for the banking and financial sector, we learn that the Committee has decided to reduce the < a href="https://www.koaci.com/recherche?search=directeurs"> Directors of the Central Bank by 50 basis points.

The sum interest rate for submission to liquidity injection tender operations thus increases from 2.50% to 2.00%.

This decision enters into force on 24 June 2020. Banks will now be able to have financial resources from the Central Bank in interest interest rate of 2.00%, one of the lowest in Africa.

With this decision, the BCEAO announces that it wishes to accompany and support the economic recovery plans implemented by the Member States of the West African Monetary Union as part of the fight against the negative effects of the health crisis.

In addition, the BCEAO explains that it counts on the commitment of banks to pass on this reduction in the cost of their resources to interest rate of loans granted to customers, in particular SMEs/SMIs, which have been greatly affected by the effects of the lockdown and other measures decided to slow the spread of the pandemic.
 

Finally, it remains to be seen how this central decision will be passed on to the  credit rates offered by commercial banks.