The Central Bank of West African States (BCEAO) has said it will bail out its member states by issuing treasury bills known as “Covid-19 Bonds,” officials from the institution revealed in Dakar on Thursday.By Massamba Sall
The decision is part of the implementation of measures taken by BCEAO to counter the negative impacts of the Covid-19 pandemic, the central bank added.
“These bonds, with a maturity of three months, will be issued on the regional financial market and will be used to meet immediate expenses related to the fight against the Covid-19 pandemic,” it said, without specifying the amount for the bonds.
In practice, BCEAO will proceed, with the assistance of the UMOA Securities Agency, with the structuring and programming of these issues.
To this end, a special three-month refinancing window has been opened by BCEAO to enable banks refinance these bills.
Through this special window, banks will thus be able to obtain liquidity from the central bank for a three-month maturity at a fixed rate of 2.50 percent.
The “Covid-19 Bonds” could be subject to refinancing through the special window from the day of issue and no later than one month after their acquisition for the remaining term of the security.
Thus, the Central Bank of West African States (BCEAO) intends to support states in mobilizing low-cost financial resources to resolve difficulties induced by the health crisis related to Covid-19.