The Central Bank of West African States (BCEAO) held the second session of its Monetary Policy Committee (MPC) on Wednesday. The Committee decided to maintain the main policy rate, at which the Central Bank lends its resources to banks, at 3.00%. The interest rate on the marginal lending facility was also maintained at 5%, and the reserve requirement ratio applicable to institutions within the Union remained at 3%.

The decision, made public this Wednesday, was taken after a careful analysis of the latest international and regional data. Internationally, the conflict in the Middle East and its severe impacts, particularly those related to rising oil prices, led the IMF to revise its global growth projections downward to 3.1%. For global inflation, the projections were lowered from 4.1% to 4.4%.

 

And this crisis in the Middle East also brings with it a certain uncertainty which forces caution: "We don't really know when it will end, how far it will go," said Jean-Claude Kassi Brou, Governor of the BCEAO, who chaired the meeting of the CPM on Wednesday.

 

And this international situation is already having an impact domestically, he emphasized. Indeed, with oil prices soaring, five member states of the West African Economic and Monetary Union (UEMOA) have already adjusted prices at the pump.

 

However, economic growth in the region has remained solid, with an expected rate of 6.1%. Inflation, which stood at -0.8% in the last quarter of 2025, has risen to -0.2%. "Inflation is rising, but it will likely remain in negative territory," Mr. Brou points out. The BCEAO forecasts a rate of 1.6% for 2026.

 

Furthermore, the governor assures that the union's external position "remains solid." This is supported by exports of gold, hydrocarbons, and cocoa, as well as by the mobilization of external resources by the member states.

 

"The external current account is around 2%. It was negative, but it has turned positive. Our reserves have been consolidated. So we are in a relatively comfortable situation in terms of reserves," assures the governor, who also reports comfortable bank liquidity.

 

Thus, in view of this rather positive situation within the Union and the risks induced by the international environment, in particular the conflict in the Middle East, the monetary policy committee played the card of prudence by keeping rates unchanged.

 

“There is no immediate danger. The indicators are green, but there is caution given the risks that weigh on the international environment. And if these risks were to materialize beyond what has already materialized, it could have an impact on our macroeconomic balances,” he emphasizes.