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June 18, 2026Journal of African Economies

Does the Central Bank of West African States have an autonomous monetary policy?

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Authors

FPFrancisco Pérez

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Overview

Examines BCEAO's monetary policy autonomy in relation to the euro's fixed exchange rate, suggesting declining independence.

Key Points

  • This study investigates the level of monetary policy autonomy of the BCEAO against the backdrop of a fixed exchange rate with the euro.
  • Utilized Unrestricted Error Correction Models for analysis from 1973Q1 to 2023Q4.
  • Examined the influence of the Banque de France and European Central Bank rates on BCEAO policy.
  • Analyzed passthrough effects of the ECB and Federal Reserve on BCEAO policy rates.
  • No significant influence of Banque de France rates on BCEAO policy during the discount rate era (1973–1998).
  • A permanent 100 basis point increase in the ECB rate correlates with a 40–46 basis point increase in the BCEAO marginal lending rate.
  • Federal Reserve passthrough remains consistently smaller than ECB passthrough, confirming the constraints stem from the euro peg.

Cite This Study

Francisco Pérez (2026) studied this question.

synapsesocial.com/papers/6a338cc3630953a74978de7chttps://doi.org/10.1093/jae/ejag009
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