If you live in Cameroon, Chad, Gabon, Equatorial Guinea, the Republic of the Congo, or the Central African Republic, your wallet is governed by a single institution in Yaoundé: the Bank of Central African States (BEAC).
While “monetary policy” sounds like a topic reserved for economists in suits, its effects are felt every time you buy a bag of rice, apply for a small business loan, or check the exchange rate for a trip abroad. In this post, we’ll break down how BEAC monetary policy explained simply can help you navigate your financial future in the CEMAC region.
Related: Cameroon’s Economy Explained.
1. What is BEAC and Why Does It Matter?
The BEAC is the central bank for the six nations of the Economic and Monetary Community of Central Africa (CEMAC). Its primary mission is to maintain price stability—essentially making sure that the CFA Franc (XAF) doesn’t lose its value too quickly.
To do this, the BEAC uses various “levers,” primarily interest rates. When the BEAC changes its TIAO (Taux d’Intérêt d’Appel d’Offres), or main policy rate, it sets off a chain reaction that eventually reaches your local bank branch.
2. Fighting Inflation: The Battle for Your Purchasing Power
Inflation is the silent thief of your income. In recent years, global supply chain disruptions and fluctuating oil prices have pushed inflation in the CEMAC zone above the regional “convergence criterion” of 3.0%.
- 2023: Inflation peaked in many areas, fueled by high food and energy costs.
- 2024: Regional inflation sat around 4.0% to 4.3% as of late 2024.
- 2025 Projection: The World Bank and BEAC project inflation to cool toward 3.1% by the end of 2025.
How BEAC reacts: When inflation is too high, the BEAC raises interest rates. By making it more expensive for commercial banks to borrow money, the central bank reduces the total amount of money circulating in the economy. Less money in circulation typically slows down price hikes, helping you afford basic necessities.
3. Interest Rates: Why Your Bank Loan Just Got More Expensive
The most direct way BEAC monetary policy explained impacts you is through the cost of credit. As of early 2025, the BEAC has maintained a relatively tight stance to stabilize the currency.
| Indicator | Approximate Rate (Early 2025) | Impact on You |
| Main Policy Rate (TIAO) | 5.0% | Sets the floor for all other interest rates. |
| Commercial Loan Rates | 7% – 15%+ | What you actually pay for a car or business loan. |
| Government Bond Yields | 6.9% – 9.8% | Affects how much your government pays to borrow. |
When the BEAC keeps its rate at 5%, your local bank cannot lend to you at 4%. Instead, they add their own “margin” (risk and profit), often resulting in double-digit interest rates. If you are a business owner in Douala or Libreville, a high-rate environment means you might delay expanding your shop because the monthly loan repayments are too steep.
4. The Peg to the Euro: Stability vs. Flexibility
Unlike many other African currencies (like the Nigerian Naira or the Ghanaian Cedi), the Central African CFA Franc is pegged to the Euro at a fixed rate of 1 EUR = 655.957 XAF.
This peg is a cornerstone of BEAC monetary policy. It provides a “nominal anchor,” meaning that because the Euro is relatively stable, the CFA Franc remains stable too. This makes it easier for CEMAC businesses to import machinery from Europe without worrying about the exchange rate crashing overnight.
However, to maintain this peg, the BEAC must keep a certain level of Foreign Exchange Reserves. If reserves drop too low—as they threatened to do in 2023/2024 due to lower oil revenues—the BEAC must tighten policy even further to protect the currency’s value.
5. Economic Growth: The Balancing Act
The BEAC doesn’t just want low inflation; it also wants the economy to grow. The challenge is that high interest rates (used to fight inflation) often slow down growth.
- 2024 Growth: Estimated at 3.0% to 3.2%.
- 2025 Outlook: Projections suggest a slight dip to 2.8% – 3.2% due to fluctuating oil production and tighter financial conditions.
When the BEAC sees that growth is too slow, it may engage in “liquidity injections”—essentially providing more cash to banks so they can keep lending to the private sector.
Summary: How to Navigate BEAC Decisions
Understanding BEAC monetary policy explained helps you make better financial choices:
- In High Inflation Periods: Focus on “needs” over “wants” and consider assets that hold value (like real estate or land), as cash loses purchasing power.
- When Interest Rates Rise: Avoid taking on new variable-rate debt. If you need a loan, try to negotiate a fixed rate before the central bank hikes again.
- Watch the Reserves: If you hear news that “CEMAC foreign reserves are falling,” expect the BEAC to get tougher on imports and interest rates in the coming months.
The BEAC acts as the “referee” of the Central African economy. While its decisions can feel distant, they are the invisible hand determining whether your money goes further today than it did yesterday.