The Central Bank of West African States (BCEAO) announced, following the meeting of its Monetary Policy Committee (CPM) held on June 4, 2025, in Dakar, a cut of 25 basis points in its main policy rate. Effective June 16, 2025, this rate will decrease from 3.50% to 3.25%, marking a turning point in the monetary policy of the West African Economic and Monetary Union (WAEMU) to stimulate growth and facilitate access to credit.
A Favorable Macroeconomic Context
This decision comes in an economic environment characterized by controlled inflation and robust growth. Inflation continued to decline in the first quarter of 2025, dropping from 2.9% to 2.3%, mainly due to improved supply of goods in the markets and a moderate rise in prices of imported products, especially energy. For the whole of 2025, the BCEAO forecasts average inflation at 2.2%, down from 3.5% in 2024, thus providing room for a more accommodative monetary policy.
On the growth front, WAEMU’s real GDP grew by 7.1% in the first quarter of 2025, after a 7.2% increase in the last quarter of 2024. For the year as a whole, growth is expected to reach 6.4%, driven by the dynamism of the manufacturing and extractive sectors.
Measures to Support and Recovery
In addition to the reduction of the main policy rate, the marginal lending facility rate is also reduced from 5.50% to 5.25%. The reserve requirement ratio for banks remains unchanged at 3.0%. According to Governor Jean-Claude Kassi Brou, this approach aims to “ease financing conditions for economic activity” and “facilitate access to credit for households and businesses” across all WAEMU member countries.
Recent statistics already show an improvement in economic financing, with loans to the economy increasing by 5.0% year-on-year at the end of March 2025, compared to 4.5% at the end of December 2024.
Perspectives and Monetary Vigilance
The BCEAO emphasizes that this decision is based on reassuring macroeconomic fundamentals, including a strengthened external position and an almost zero current account deficit. However, the central bank remains attentive to developments in inflation and the economic situation and is ready to adjust its policy if necessary to preserve monetary stability in the Union.
This measure is part of a regional trend, as the Bank of Central African States (BEAC) also recently lowered its policy rate, reflecting a shared determination to support economic recovery amid global uncertainty.
In summary
The reduction of the main policy rate to 3.25% by the BCEAO, effective from June 16, 2025, aims to strengthen economic recovery in the WAEMU. It is based on declining inflation, sustained growth, and macroeconomic stability, while maintaining vigilance over medium-term risks.
