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Public Securities Market: SVTs participate more actively in auctions thanks to Cobac

20/02/2025
Source : ORISHAS FINANCE
Categories: Index/Markets

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The Minister of Finance announced to investors on February 13, 2025 in Douala, the economic capital of Cameroon, that banks operating as Specialists in Treasury Securities (SVT) on the subregional public securities market will finally not be required to make a provision of 90% on their own funds , for each loan made to the benefit of the State of Cameroon all year round.

Cobac's decision to grant zero weighting on Cameroonian Treasury securities for the year 2025 repeals the provisions of the circular letter signed on October 18, 2024 by the Secretary General of this organization responsible for regulating the banking sector in CEMAC countries (Cameroon, Congo, Gabon, Equatorial Guinea, Chad and CAR). Louis Paul Motazé, Minister of Finance declared “(...) I would also like to express my gratitude to the Central African Banking Commission (Cobac). By granting zero weighting to public securities for the year 2025, it created an incentive framework, allowing SVTs to participate more actively in auctions, to invest more and to strengthen the depth of our

financial market.”

In reality, due to non-compliance with certain surveillance criteria adopted by the Community (inflation rate, budget deficit, debt ratio, etc.), is 80% for Congo, 85% for Congo, 85% for the Central African Republic and Equatorial Guinea, 90% for Cameroon and the Chad, and 100% for Gabon, this weighting rate, which is a kind of deterioration of the borrowing profile of CEMAC states. This means that for Cameroon, for example, each SVT that undertakes to invest one billion CFA billion in securities issued by the country must ensure that it makes a provision of at least 900 million CFA francs on its own funds to cover its credit risk

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