12 July 2017

Cameroon: FCFA Currency - BEAC Dismisses Devaluation Rumours

The Governor of the sub-regional central bank told a press conference yesterday July 11, 2017, that the currency is not in bad shape as it is given to believe.

The Governor of the Bank of Central African States (BEAC), Abbas Mahamat Tolli has said the current slowdown in economic growth in the sub-region is not similar to the one in the early nineties, dispelling rumours that there are plans to once again devalue the Central African CFA Franc. Abbas told reporters during a press conference at the BEAC headquarter in Yaounde, Tuesday July 11, 2017, that the value of the currency issued by the unique central bank of Cameroon, Chad, Gabon, Equatorial Guinea, Central African Republic and the Republic of the Congo, will remain the same for the time being. Going by the BEAC Governor, since the last devaluation of the FCFA on January 12, 1994, the central bank has observed a phenomenon whereby individuals have been circulating unfounded information relating to another depreciation of the legal tender. Abbas said they were even overwhelmed recently with the social media hoax that the Central African CFA Franc as well as that of West Africa will be devalued. According to the BEAC Governor, the present economic and financial situation of the Central African Economic and Monetary Community (CEMAC) and that prior to the devaluation in 1994 are totally different. He said the last devaluation was done to absorb the profound financial and economic disequilibrium which befell African countries of the Franc zone after the failure of structural adjustments in the late eighties. CEMAC member countries at that time were facing a serious economic recession, considerable budget deficits, substantial balance of payment deficits occasioned by drop in global commodity prices, amongst others. However, Abbas insisted that the situation between then and now are completely different. He noted that economic growth rate in CEMAC presently stands at 0.8 per cent, as against -0.3 per cent in 1993, while investment rate in 2017 is 23.5 per cent of Public Investment Budget as against 18.8 per cent obtainable in the wake of the 1994 devaluation. The sub-regional budget deficit also presently stands at 3.5 per cent of PIB, contrary to 9.7 per cent of PIB in 1993. Abbas also cited inflation rate, current external balance, amongst other aspects as being more favourable than was the case before the 1994 devaluation.

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