Record uptake in weekly tenders
Commercial banks across Central Africa have scooped up most of the liquidity recently injected by the Bank of Central African States, confirming that the March 2025 policy pivot toward easing is reverberating through funding markets. Regional lenders absorbed 932 billion FCFA, or nearly 80 percent, within seven days.
According to the central bank’s weekly tender data, credit institutions mobilised 474 billion FCFA during the 26 August auction and 458 billion FCFA one week later, leaving only modest residual sums on the table. The combined envelope represented 77.6 percent of the 1.2 trillion FCFA available.
Liquidity pulse after rate cut
In March, the Monetary Policy Committee lowered the tender interest rate from 5 percent to 4.5 percent, ending a two-year tightening cycle that had sought to curb double-digit inflation. Officials described the move as a calibrated response to price pressures normalising and to banks’ deteriorating term-funding ratios.
The immediate aftermath was a surge in refinancing requests that occasionally topped 500 billion FCFA per session, prompting the central bank to widen its weekly offer corridor from 200 billion to the current 600 billion ceiling. Market participants saw the gesture as a confidence signal rather than a dramatic stimulus.
Headline inflation across the six-member bloc eased to 7.8 percent year-on-year in June, according to provisional BEAC statistics, compared with peaks near 20 percent in late 2023. The softer reading gave policymakers room to fine-tune support for productive sectors without undermining the medium-term convergence programme agreed with the IMF.
Interbank appetite and credit cycle
Commercial loan growth nonetheless stayed buoyant, advancing 11 percent in the first half of 2025, driven by oil, logistics and telecom projects. Because many deals carry variable-rate clauses, banks sought to lock in cheaper central-bank funding to preserve spreads and maintain prudential liquidity ratios above the 100-percent Basle III threshold.
One treasurer at a Brazzaville-based universal bank said the tender window “allows us to finance a growing pipeline without disturbing deposit pricing.” His desk now budgets for 50-60 billion FCFA of weekly repos, compared with less than 30 billion before the March pivot, indicating structural rather than opportunistic demand.
Spotlight on Congo-Brazzaville lenders
Congo-Brazzaville’s banking sector, which represents roughly 9 percent of CEMAC assets, drew 38 billion FCFA across the two latest tenders, according to market disclosures. The figure is consistent with the country’s steady rise in outstanding credit to small and mid-sized firms engaged in timber processing and urban infrastructure contracts.
Local observers note that state-guaranteed public-works programmes, including sections of the Pointe-Noire economic corridor, have improved banks’ collateral profiles, thereby facilitating access to central-bank refinancing. This dynamic underpins sovereign efforts to channel capital into logistics and diversified exports while safeguarding financial-system stability.
Investor reading of government debt market
The sharp uptake of central-bank liquidity has also influenced yields on the regional government securities market. Treasury bills issued at the Douala auction platform cleared at 4.15 percent in early September, about 25 basis points lower than the previous month, signalling improved systemic liquidity and sustained investor appetite.
Figure 1 in the accompanying dashboard maps the correlation between weekly BEAC allotments and secondary-market yields since January. The negative slope validates dealers’ view that abundant reserves are gradually easing the region’s sovereign financing costs without jeopardising the CFA franc’s peg to the euro.
Outlook and key watchpoints
Despite the recent moderation in tender demand to roughly 450 billion FCFA, analysts do not view the trend as a sign of tightening. Instead, they argue banks have adjusted to a new steady-state reserve preference, aided by rising on-lending to corporates and ongoing treasury-bill reinvestment.
A senior BEAC official indicated that the committee will revisit the policy rate in December, guided by a forward inflation projection currently anchored at 5.2 percent for 2026. “Our baseline foresees no immediate reversal, yet we retain the flexibility to respond swiftly to external shocks,” he noted.
Key risk factors include commodity-price volatility, climate-related spending pressures and geopolitical uncertainties that could disrupt maritime trade routes critical to the region’s oil exports. Yet, for now, the combination of moderated inflation and active liquidity management appears supportive of both bank profitability and public-investment pipelines.
Investors monitoring Central Africa’s macro narrative will therefore focus on December’s rate meeting, monthly liquidity statistics and headline inflation prints. Should the current alignment hold, the bloc may enter 2026 with a more predictable funding curve, bolstering medium-term growth prospects across energy, mining and digital infrastructure.
For Congo-Brazzaville specifically, lower funding costs could accelerate the rollout of the 45-megawatt Liouesso hydropower upgrade and support the planned sovereign-sustainability bond that aims to monetise forest-carbon assets. Market consultants believe successful execution would enhance the country’s credit profile and deepen regional capital-market integration.
Balancing growth and stability
Ultimately, the central bank’s delicate balancing act—loosening enough to nurture credit while guarding the franc’s external stability—will remain central to boardroom and cabinet conversations alike. The latest tender results hint that, for now, the policy compass is calibrated to keep the post-pandemic recovery on course.
