• BEAC cuts liquidity to 550B CFA as Demand was stalling but banks sought record 638.5B
• Demand surge follows March interest rate cut ending tightening
• Student loan season boosts credit appetite across sub-region
  

The Bank of Central African States (BEAC) has seen an unexpected reversal in its monetary policy operations, as commercial bank demand for liquidity surged to a historic high just as the central bank reduced its offering.

On Thursday, Sept. 18, the BEAC provided 550 billion CFA francs in liquidity to commercial banks. This was a reduction from the record 600 billion CFA francs offered since late August, a decision made after the banks consistently failed to absorb the full amount. Their actual needs had been hovering between 400 billion and 500 billion CFA francs weekly.

However, the liquidity injection saw an unprecedented outcome. Commercial banks demanded 638.5 billion CFA francs, shattering the 550 billion CFA francs on offer and setting a new record for the region.

This renewed demand for BEAC liquidity coincides with the period of high demand for student loans, signaling a certain dynamism in the sub-region's credit market.

The surge in demand is also attributed to the BEAC's monetary policy shift. In March 2025, the central bank lowered its key interest rate, the Tender Interest Rate (TIAO), at which commercial banks refinance. This decision ended more than two years of monetary tightening, which had seen successive TIAO increases aimed at curbing inflation.

In response to the initial rise in demand following the policy change, the BEAC had progressively raised its intervention ceiling from 200 billion to a historic 600 billion CFA francs. While this ceiling was recently revised downward, the record demand on Sept. 18 suggests banks' appetite for credit is far from waning.