• BCEAO 2025 net profit falls 14% to 588 billion CFA francs

• Dollar depreciation drives foreign exchange losses, reversing prior gains

• Gold revaluation and reserves buffer impact; balance sheet expands 24%

The Central Bank of West African States (BCEAO) reported a 14% drop in 2025 net profit to 588 billion CFA francs ($897 million), driven by a 92-billion-franc swing in foreign exchange income. The decline was mainly due to the depreciation of the U.S. dollar against the euro on international markets, according to the bank's annual financial statements certified by Deloitte Côte d'Ivoire.

The bank’s net foreign exchange result turned negative at 30 billion CFA francs, compared with a positive 62 billion in 2024, marking a 92-billion-franc deterioration. The CFA franc has been pegged to the euro at a fixed rate of 655.957 francs per euro since 1999 and therefore tracks movements in the European currency against others. The dollar fell 11.58% against the euro in 2025, from 631.40 to 558.26 CFA francs, weighing on a significant share of the central bank’s revenues.

The deterioration in foreign exchange income was mainly driven by a sharp drop in realized exchange gains, which fell 79% to 51 billion CFA francs from 245 billion in 2024. At the same time, unrealized losses on foreign currency positions widened to 857 billion CFA francs from 493 billion a year earlier.

To limit the hit to earnings, the BCEAO drew 40 billion CFA francs from its foreign exchange revaluation reserve, in line with rules set by the WAEMU Council of Ministers in 2016. The mechanism acts as a buffer between currency market fluctuations and the income statement. In periods of gains, part of the increase is set aside in reserves rather than booked as profit. In adverse periods such as 2025, the reserve is used to offset losses. Without this buffer, the decline in net profit would have been sharper.

Gold cushions the impact

The outcome would have been significantly worse without the effect of gold. According to BCEAO data, holdings of precious metals rose 44% in 2025 to 3.640 trillion CFA francs (5.5 billion euros), supported by higher London gold prices, which increased from the equivalent of 1.665 million to 2.394 million CFA francs per ounce. The revaluation generated 1.108 trillion CFA francs in unrealized gains, recorded outside net profit under other comprehensive income, in line with International Financial Reporting Standards (IFRS).

As a result, the BCEAO’s total balance sheet expanded 24% to 40.595 trillion CFA francs, while comprehensive income — which includes these valuation effects — rose 10% to 1.711 trillion francs. The balance sheet reflects a record level of wealth.

Policy rates under scrutiny

A domestic factor also weighed on the income statement. The BCEAO’s Monetary Policy Committee cut its key rates by 25 basis points on June 16, 2025, lowering the minimum rate on liquidity injection tenders to 3.25% and the marginal lending facility rate to 5.25%. The move, taken as inflation pressures eased in the region, reduced refinancing revenues by 18% to 396 billion CFA francs.

“The rate cut reduces returns on refinancing operations, but it is essential to support credit growth in a region where economic activity remains driven by governments running budget deficits,” a Beninese economist said. “The MPC chose to prioritise the real economy over short-term interest margins.”

WAEMU economic growth is estimated at 6.7% in 2025, compared with 6.2% in 2024, according to the central bank’s projections.

Fiacre E. Kakpo