Monetary policy is determined by the regional central bank, Banque centrale des Etats de l'Afrique de l'ouest (BCEAO), the priorities of which are to control inflation and maintain the CFA franc's peg to the euro. Policy will therefore continue to be influenced by that of the European Central Bank (ECB). In response to cuts in the ECB's refinancing rate, the BCEAO reduced its repurchase rate (taux de pension) by 50 basis points to 4.25% in June 2009. However, we now expect the ECB to announce a 25-basis-point rise in euro area interest rates in the near future, most likely April, followed by an increase of similar magnitude by the end of 2011. A further tightening is likely in 2012, with the ECB's main policy rate reaching 2%, compared with 1% at present. The BCEAO is likely to continue to track developments in the euro zone, with gradual increases in its main policy rate, the taux de pension, during 2011-12. However, we also expect the regional central bank to continue with regular liquidity injections, which will remain its prime policy tool.