The real effective exchange rate of Central African Economic and Monetary Community (CEMAC), which measures price competitiveness, increased in the third quarter of 2018, indicating a loss of competitive positions in international markets compared to the second quarter of the same year, according to the latest analysis from the Bank of Central African States (BEAC).
On a quarterly average, the overall rate appreciated by 1.8 percent, with the CFA franc, the sub-regional currency, in real terms, depreciating against the dollar (-3.1 percent) and the euro (-0.3 percent).
Between the 2nd and 3rd quarters of last year, the sub-region also recorded a slight depreciation of exports of around 0.3 percent, a trend reversal compared to the previous period, due to an appreciation of the sub-regional nominal effective exchange rate of around 1.9 percent, while inflationary pressures continued their upward trend, while remaining nevertheless contained below the Community standard of 3.0 percent on an annual average.
The annual average inflation rate thus increased from +0.6 percent at the end of September 2017 to +1.5 percent at the same period in 2018, after +1.4 percent at 30 June 2018, while the nominal appreciation of the CFA franc resulted in a loss of competitiveness on the international markets of the main products exported by CEMAC countries, particularly wood, cocoa, manganese, livestock and cotton.
Thus, in the third quarter of 2018, the overall index of commodity prices exported by CEMAC contracted by 0.3 percent compared to the previous quarter, due to a general decline in the prices of products, excluding energy products.
In general, commodity prices recorded various trends during the period under review, marked by an increase in energy prices (1.2 percent) but a general decline in the prices of other commodities, particularly agricultural (-8.6 percent), fishing (-3.8 percent), forestry (-3.8 percent), metals and minerals (-1.5 percent).