Recent Challenges to the Conduct of Monetary Policy in the WAEMU: WAEMU
May 17, 2024
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This paper discusses recent challenges in BCEAO monetary policy, from a recent spike in inflation, the persistent erosion of external reserves, and strains in the regional financial market. In response to these shocks, the BCEAO operated via both policy rates and liquidity management, including by shifting from fixed to variable rate auctions. The paper finds that the conduct of monetary policy became progressively more constrained by financial stability and external viability challenges, arguing for enhanced monetary-fiscal policy coordination to help the BCEAO meet its reserves objectives.
Subject: Asset and liability management, Central bank policy rate, Central banks, Financial institutions, Financial sector policy and analysis, Financial sector stability, Financial services, International organization, International reserves, Liquidity, Monetary policy, Securities
Keywords: BCEAO, BCEAO purchase, BCEAO refinancing, Central bank policy rate, CFA franc, conduct of monetary policy, Financial sector stability, FX reserve, Global, International reserves, Liquidity, monetary policy, Securities, viability challenge, WAEMU, West Africa
Pages:
19
Volume:
2024
DOI:
Issue:
013
Series:
Selected Issues Paper No. 2024/013
Stock No:
SIPEA2024013
ISBN:
9798400274121
ISSN:
2958-7875
