• BCEAO holds key rates, citing stable growth and low inflation
• WAEMU GDP grows 6.5%; inflation drops to 0.6% in Q2
• Risks persist from insecurity, weather, and global trade tensions

The Monetary Policy Committee of the Central Bank of West African States (BCEAO) chose to hold its key interest rates, it announced following a meeting in Dakar on Wednesday.

The bank is keeping its main lending rate to commercial banks at 3.25%, the marginal lending rate at 5.25%, and the reserve requirement ratio at 3%. These levels have been in effect since the bank's last decision in June.

The decision was based on a favorable regional economic outlook. The West African Economic and Monetary Union's (WAEMU) gross domestic product (GDP) grew by 6.5% in the second quarter of 2025, after a 7% increase in the previous quarter. The BCEAO projects overall growth for the year will reach 6.3%, a pace similar to 2024. This performance is driven by strong household consumption and continued public investment in the energy and transport sectors.

The inflation trend is also encouraging. The inflation rate fell to 0.6% in the second quarter, down from 2.2% three months earlier. This decline is attributed to an abundance of food products on local markets, as well as falling global prices for energy and some food commodities. For the full year, the bank projects average inflation will be 1.2%, well below the 3.5% recorded in 2024.

However, the BCEAO remains cautious. The central bank noted that risks remain, including ongoing insecurity in several Sahel countries, weather-related events that could affect harvests, and geopolitical or trade tensions that could drive up import costs. These threats could reignite inflationary pressures and destabilize the region's external balances.

For now, the overall balance of external trade has improved, supported by a rise in exports and external resource mobilization by some member states. The committee said it would take "appropriate measures" if necessary to preserve the monetary and financial stability of the Union.