The Central Bank of West African States (BCEAO) kept its main policy rate unchanged at 3.50% on 4 December 2024, as inflation across the West African Economic and Monetary Union (WAEMU) remained above its target range.
The bank's Monetary Policy Committee, which met in Dakar under the chairmanship of Governor Jean-Claude Kassi Brou, also left the marginal lending facility rate at 5.50%. Both rates have been in force since 16 December 2023.
INFLATION ABOVE TARGET
According to the committee's communiqué, inflation in the eight-member union stood at 4.1% in the third quarter of 2024 before easing to 3.4% in October, with both readings above the BCEAO's target range of 1% to 3%. The committee attributed the persistence of price pressures mainly to insufficient local supply of food products from the 2023/2024 agricultural season. It projected average inflation of 3.6% for 2024, compared with 3.7% in 2023.
The committee flagged upside risks to inflation in 2025, linked to the security situation in some member states, the potential impact of adverse weather on agricultural output, and geopolitical tensions that could push up global energy and food prices.
GROWTH REMAINS DYNAMIC
On the real economy, the committee said activity remained dynamic in the near term, supported by adequate financing. It projected growth for the union of 6.0% in 2024 and 6.3% in 2025. Credit to the economy grew by 5.9% year on year at the end of September 2024.
WAEMU groups Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo, which share a common currency, the CFA franc, and a single monetary policy set by the BCEAO. The committee said it would continue to monitor inflation and the economic, financial and monetary situation in the coming months.
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