In office since February 2017, Chadian Abbas Mahamat Tolli met with Christine Lagarde, Executive Director of the International Monetary Fund (IMF) on June 15, 2018 in Washington. The latter welcomed the reforms undertaken by the institution and the Central African Banking Commission (COBAC).
“The efforts undertaken, as well as the macroeconomic and structural reforms implemented by the states, with the support of the international financial community, are gradually contributing to stabilize the macroeconomic and financial framework of the CEMAC”, reads in a published document the bank Wednesday, June 20th.
“The beneficial effects of these actions are perceptible on the level of foreign exchange reserves whose haemorrhage was stopped, and the evolutions observed augur favorably of a gradual return on a path of healthy and sustained economic growth,” he continues. Indicating that the objective is “to restore the major macroeconomic balances, boost growth and strengthen the external sustainability of the subregion, in a medium-term perspective of deep economic transformation and significant reduction of poverty”.
The BEAC also indicates that the implementation of the reforms resulted, since the arrival of Chad, in the revision of the Statutes of the Central Bank, the reform of the instruments of the monetary policy, the launching of the Strategic Plan of the Bank (PSB) and support for the implementation of the Economic and Financial Reform Program of CEMAC (PREF-CEMAC).
“Revitalize the interbank market”
As part of the conduct of monetary policy, the BEAC announces having “proceeded since March 2017, to a reorientation of its monetary policy”. Objective, to cope with the economic and financial difficulties facing the economies of its member states since 2014, and to strengthen the external reserves of the sub-region.
The measures taken to this end are aimed primarily at reducing the volume of central bank liquidity in order to lower the pressure on reserve assets, to reinvigorate the interbank market, to optimize liquidity management, to ensure better monitoring of transfers. and outward position, to reduce the perception of credit risk by improving the quality of financial information and to promote capital markets.
The Strategic Plan, which covers the period 2017-2020, aims to bring the institution “to the level of the best international standards”. It focuses on improving the effectiveness of monetary policy, improving the management of currency signs, revitalizing the management of foreign exchange reserves, strengthening the system of exchange regulations, consolidating payment and settlement and the promotion of financial stability, among others.
What about the Cobac?
On the side of the Banking Commission of Central Africa (COBAC), we note an update of the supervision system “to take into account the changes in the international environment as well as shortcomings”. It has adopted – and is implementing – a strategic plan called “COBAC: a new dynamic”.
Indeed, it is said that several major reforms, in line with the best international standards, have come into force for credit and microfinance institutions since January 2017. A supervision of banking groups has also been introduced. .
“These reforms are aimed at correcting the vulnerabilities of the CEMAC banking system and at strengthening its resilience, particularly through an intensification of the resolution efforts of banks in difficulty, the introduction of dissuasive penalty measures to enforce the regulations, and the implementation of a systemic bank supervision framework, “says the BEAC note.