• WAEMU banking liquidity increased by CFA1,700 billion ($3.02 billion) in one year, according to BCEAO Governor Jean-Claude Kassi Brou.

• Private-sector credit grew by 6% year-on-year, supported by abundant liquidity and strong economic activity.

• Regional inflation fell to –1.3% in Q3, easing financing pressures and strengthening the monetary environment.

The sharp rise in liquidity across the West African Economic and Monetary Union signals a rare moment of financial calm. Strong growth, falling inflation and favourable terms of trade currently support both banks and governments.

Banking liquidity in the WAEMU increased to roughly CFA1,700 billion ($3.02 billion) in one year, Governor Jean-Claude Kassi Brou said on Wednesday, 3 December 2025, after the Monetary Policy Committee meeting. The rise marks a clear easing in financing conditions across the Union at a time when economic activity remains vigorous and several macroeconomic factors reduce pressure on the banking system.

Brou said “banking liquidity is abundant” and reflects a financial sector “able to support economic momentum.” Private-sector credit grew by 6% year-on-year, confirming that “banks are adequately financing growth.”

Real GDP in the Union expanded by 6.6% in the third quarter. A strong agricultural season, a rebound in services, resilient manufacturing and a sharp rise in hydrocarbon output drove the performance. Oil production increased from 120,000 barrels per day to more than 240,000 barrels per day in 2025. Rising gold and cocoa prices further strengthened regional income. These gains improved the Union’s terms of trade and reduced external financing needs, which indirectly supported the improvement in overall liquidity.

Market indicators reinforced the trend. Marginal rates applied during BCEAO refinancing operations fell from 5.5% to about 3.5%–4% between June and October 2025, while liquidity injections remained stable at roughly CFA7,900–8,100 billion per operation. Bank submissions continued to exceed allocations by a wide margin, showing strong structural demand, yet domestic liquidity now meets a larger share of these needs.

At the same time, the sharp decline in inflation — which fell to –1.3% in the third quarter — eased cash-flow pressures across the economy. Lower global food and energy prices, strong local agricultural supply and reduced import bills helped banks maintain more comfortable liquidity positions. This shift also improved the Union’s external position and reduced pressure on reserves, which supported financial stability and helped the money market operate more smoothly, Brou said.

The interbank market has begun to take over more of the liquidity circulation. It recorded its highest volume of the year in October, reaching nearly CFA920 billion, compared with about CFA780 billion in August. The increase signalled a clearer flow of liquidity between institutions. Interbank rates eased slightly, with the average one-week rate settling around 4.8%, sometimes below the policy rate, while the one-month rate stood at about 6%, a small retreat from the first half of the year.

Fiacre E. Kakpo