The Central Bank of West African States (BCEAO) left its key policy rates steady, saying inflation is projected to be in line with the target in the horizon of 24 months while economic activity is continuing at a "robust pace."
The BCEAO - the central bank for the eight west african states of Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo - maintained the rate on tenders in cash at 2.50 percent and the marginal lending rate at 3.50 percent, unchanged since September 2013.
Inflation in the West African Economic and Monetary Union (UEMOA), which came into effect in 1994, slowed to an annual rate of 0.8 percent by end-March, down from 1.3 percent at the end of December last year due to lower food prices.
Looking 24-months ahead, the central bank said inflation was projected at 1.9 percent, but added monetary conditions in the union were strained due to weak activity in the interbank market with a weighted average rate of 3.82 percent in the first quarter, up from 3.49 percent in the previous quarter.
Gross Domestic Product in the union was up by 7.1 percent in the first quarter of this year compared with 7.2 percent in the previous quarter, and is projected to average 7.2 percent this year compared with 7.0 percent in 2015.
The central bank attributed the strong growth to "consolidation of the activity in the secondary sector and good performance of the service sector."