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West African Central Bank cuts main rate by 25 basis points

By on March 8, 2013

The Central Bank of West African states said on Wednesday it had cut its key lending rate by 25 basis points to 2.75 percent, taking advantage of moderate inflation to seek to stimulate growth in the eight-nation bloc.

It was the second cut to rates in eight months after the bank trimmed its key lending rate by 25 basis points to 3 percent in June, citing political crises in Mali and international economic uncertainty.

“Based on an analysis of the base of risks, the committee decided to lower the main rate by 25 basis points,” the central bank’s governor, Tiemoko Meyliet Kone, said after a meeting of the Monetary Policy Committee in Dakar.

“In a context of moderate inflation, this decision aims to consolidate the relaxation of interest rates with a view to improving the financing conditions for growth in the heart of the monetary union,” he said.

The bank also cut its marginal lending rate by 25 basis points to 3.75 percent from 4.00 percent.

The bank serves former French colonies Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal and Togo, along with former Portuguese colony Guinea-Bissau.

The states all use the CFA franc common currency, currently tied to the euro at a fixed exchange rate of one euro to 655.957 CFA francs, with the peg guaranteed by the French treasury.

 

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