Country Report Benin April 2008

Outlook for 2008-09: Monetary policy

Benin's monetary policy is set by the regional central bank, Banque centrale des Etats de l'Afrique de l'ouest (BCEAO), whose priorities are to control inflation and maintain the CFA franc's peg to the euro. Monetary policies will therefore remain influenced by those of the European Central Bank (ECB), although BCEAO interest rates are typically higher than ECB rates and also take account of local circumstances, such as the level of inflation and bank liquidity. We currently forecast that the BCEAO's discount rate will remain at 4.5% in 2008 and fall to 4.25% in 2009.

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