Wednesday, March 6, 2013

West African central bank cuts rate 25 bps to 3.75%

    The Central Bank of West African States (BCEAO) cut its benchmark marginal lending rate by 25 basis points to 3.75 percent in light of moderate inflation and weak global demand.
    The central bank, which has held its rates steady since June 2012 when it cut by 25 basis points, said inflation expectations over the medium term are in line with the bank's objective, with inflation forecast at 1.5 percent year-on-year in the fourth quarter of 2013.
    "Factors behind the moderation of the inflation include weak global demand that mitigates the risk of imported inflation and lower food prices in the perspective of a 2013/14 crop that is satisfactory," the central bank said in a statement.
    Inflation in the eight states that comprise the West African Monetary Union has gradually declined since last October to 2.2 percent at the end of January.
    Economic growth in the eight nations confirms real Gross Domestic Product growth of 5.8 percent in 2012 and "for 2013, the revival of economic activity is expected to continue with a projected real growth rate of 6.5%," the central bank said.
    "Analyzing the economic situation, the Committee noted the persistence of a gloomy international economic situation fraught with uncertainty," the central bank said.


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