CEMAC ZONE : Beac maintains key interest rates amid deteriorating economic environment

(LVDE) – At its September 29, 2025 meeting, the Bank of Central African States (Beac) decided to keep its key policy rates unchanged, despite bleak growth prospects for the sub-region. The decision reflects a cautious approach in the face of mounting economic challenges.

On September 29, 2025, Beac’s Monetary Policy Committee (MPC) met via videoconference to assess the sub-region’s economic situation. Confronted with worsening growth prospects, the central bank opted to maintain its main policy rates, extending the prudent stance already observed during its previous session in June 2025.

At the international level, Beac based its analysis on the latest data from the International Monetary Fund (IMF). In its World Economic Outlook published in July 2025, the IMF projected global growth of 3% for 2025, down from 3.3% in 2024, with a modest recovery to 3.1% expected in 2026. This slowdown is attributed to weaker trade and investment in many advanced economies, creating a less favorable external environment for Cemac.

Regarding regional growth, Beac’s updated forecasts point to real GDP growth of 2.6% in 2025, slightly below the 2.7% recorded in 2024. The stagnation is mainly driven by a sharp contraction in the oil and gas sectors, which are expected to fall by 1.5% in 2025, following a 0.4% decline the previous year. By contrast, the non-oil sectors are projected to grow by 3.2%, remaining stable compared to 2024.

These new projections contrast with the central bank’s more optimistic June forecast of 2.9% growth. In just three months, expectations have been revised downward by 0.3 percentage points, underscoring the region’s continued reliance on hydrocarbons.

On inflation, Beac noted a marked improvement. After reaching 4.1% in 2024, average inflation in the zone is expected to ease to 2.6% by the end of 2025, thus falling below the community benchmark of 3%. In June, the bank had already forecast 2.8%, suggesting a sustained decline in inflationary pressures that began earlier in the year.

However, Beac also pointed to worsening external and fiscal balances. The current account deficit is projected to widen to -2.2% of GDP in 2025, compared with -0.2% in 2024, while the fiscal deficit (excluding grants) is expected to rise from -1% to -1.3% of GDP.

Foreign exchange reserves, though projected to decline by 7% by year-end, remain adequate by international standards, covering 4.6 months of imports of goods and services versus 4.8 months in 2024. The external coverage ratio of the CFA franc—a key indicator of monetary stability—is estimated at 73.2%, down slightly from 74.9% a year earlier.

Against this backdrop, the MPC decided to keep the key policy rate for open-market operations at 4.5%, the marginal lending facility at 6%, and the deposit facility at 0%. The reserve requirement ratios were also maintained at 7% for demand deposits and 4.5% for term deposits.

It is worth noting that in the Uemoa zone, the BCEAO adopted a similar stance, keeping its policy rates unchanged, with the minimum bidding rate for liquidity injection operations set at 3.25% and the marginal lending rate at 5.25%. This alignment among the region’s monetary institutions highlights a shared cautious approach in the face of growing economic headwinds.

Esther Grace