West African States holds rate, sees 1.8% inflation

    The Central Bank of West African States (BCEAO), the monetary authority representing eight nations in western Africa, maintained its benchmark marginal lending rate at 3.50 percent and forecast annual inflation of 1.8 percent in the next 24 months, in line with its stability objective.
    BCEAO, which has kept its marginal lending and liquidity injection rate of 2.50 percent steady since September 2013, added that inflation in the West African Monetary Union (WAMU), rose to a rate of 0.5 percent at the end of March from 0.4 percent in December 2014 due to higher cost of food, building materials and housing services in some countries.
    In the first quarter of 2015, the Gross Domestic Product of WAMU expanded by an annual 6.2 percent, driven by a strong services sector, and for the full year growth is projected at 6.7 percent, up from 6.5 percent in 2014 due to growth in industrial and services sectors.
    BCEAO noted "continued government deficits at high levels," but added this was in conjunction with significant investment in infrastructure in most states. However, the Monetary Policy Committed on June 3 called on fiscal consolidation in the medium term.
    In April BCEAO Governor Tiemoko Meyliet Kone said growth in the currency union was on track to reach 7 percent this year, helped by a recovery in Europe and expected 9.1 percent growth in the Ivory Coast,  the world's largest cocoa producer and over one-third of the bloc's $80 billion economy.
    The eight members states in BCEAO, headquartered in Dakar, comprise Benin, Burkina Faso, the Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. These nations, grouped in WAMU, share a single currency, the franc of the African Financial Community, or the CFA franc. The CFA franc is fixed at 655.957 to the euro.
    The union's central bank, headquartered in Dakar, serves Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal, Togo and Guinea-Bissau. Its CFA franc is fixed at 655.957 to the euro.

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West African States keeps rate, growth trending up

    The Central Bank of West African States (BCEAO) held its benchmark marginal lending rate steady at 3.75 percent, saying inflation remains moderate and economic growth is continuing its upward trend toward this year's target of 6.5 percent in the eight-nation West African Monetary Union (WAMU).
    The central bank's monetary policy committee, which met in Dakar on June 3, said in a statement that inflation eased to 2.3 percent at the end of April from 2.8 percent end-December due to a sharp drop in the price of local food and a small rise in petroleum product prices.
    "The medium-term outlook remains consistent with the objective of price stability in the EU. At the 24-month horizon, the inflation rate would be at 2.5% yoy," the central bank said.
   Interest rates in the money market have also eased, with the weighted average call rate on liquidity offers for one-week down to 2.81 percent in April from 3.07 percent in December.
    Economic growth last year was better than expected, the central bank said, with Gross Domestic Product volume expanding by 6.4 percent due to higher public investment, with spillover effects on private investment, and dynamic activity in the extraction industry.