June 11, 2012 / 7:06 PM / 6 years ago

UPDATE 1-West Africa BCEAO cenbak cuts rate by 25 bps

* W.Africa cenbank cuts key rate to 3 pct

* Revises 2012 growth forecast downward

* Says West Africa region facing uncertainties (Adds details, quotes)

By Bate Felix

DAKAR, June 11 (Reuters) - The Central Bank of West African states on Monday cut its key lending rate by 25 basis points to 3 percent on adverse international environment weighing on the region’s growth, the bank said in a statement.

Kone Tiemoko Meyliet, governor of the eight-nation central bank BCEAO, said the bank’s monetary policy committee (MPC) decided to cut it’s marginal rate effective from June 16, following an assessment of risks facing the region.

“The Committee reviewed the economic, monetary and financial situation of the West African Monetary Union (WAMU) in the light of recent evolution the international situation, in particular, the risk factors that may weigh on price stability and the prospects for economic growth in the union,” Meyliet said.

The bank said that though 2012 growth would be better than the previous year on the back of economic recovery in post-conflict Ivory Coast and investments in mining and infrastructure projects in the region, the crisis in Mali and Guinea Bissau and uncertainty in the international environment were causes of concern.

“Given these uncertainties, the latest estimates put real GDP growth rate of the union at 5.3 percent in 2012, compared with an initial forecast of 6.4 percent in November 2011,” the bank said in the statement after the MPC meeting in Dakar.

It said there were signs inflationary pressures were easing with consumer prices falling to 0.6 percent in April from 2.3 percent year-on-year in January, 2.8 percent in February and 2.5 percent in late March.

BCEAO is the central bank for former French colonies Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. They all use the CFA franc common currency currently tied to the euro at a fixed exchange rate of one euro to 655.957 CFA francs, with the peg guaranteed by the French treasury.

For a full statement from the Central Bank in French please click here:

here (Reporting by Bate Felix; editing by Ron Askew)

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