The Monetary Policy Committee (MPC) of the Bank of Sierra Leone (BSL) has reduced the country’s Monetary Policy Rate (MPR) by two percentage points to 16.75 percent, citing easing inflationary pressures and improving macroeconomic conditions.

The decision was taken during the MPC meeting held on December 16, 2025, chaired by the Governor of the Bank of Sierra Leone, Dr. Ibrahim L. Stevens, and was subsequently approved by the BSL Board of Directors on December 17, 2025. The new rates will take effect from December 19, 2025.

According to the Bank, the policy adjustment follows a comprehensive review of both global and domestic economic developments, as well as an assessment of risks to inflation and economic growth.

The Committee noted that global economic growth is projected by the International Monetary Fund (IMF) to slow slightly from 3.3 percent in 2024 to 3.2 percent in 2025, an improvement from the 3.0 percent forecast earlier in July 2025. The upgraded outlook is attributed to supportive macroeconomic policies, easing supply chain constraints, and moderating commodity prices. Global inflation is also expected to continue declining, creating room for cautious monetary easing in many economies.

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Domestically, inflationary pressures have continued to subside, with headline inflation declining to 4.4 percent in October 2025 from 5.4 percent in the previous month—the lowest level recorded since July 2014. The decline reflects the impact of prudent monetary policy, fiscal consolidation, a relatively stable exchange rate, improved domestic food supply, and lower global food and energy prices.

The MPC stated that the easing inflation environment has created favourable conditions for economic growth. Real Gross Domestic Product (GDP) is projected to grow by 4.4 percent in 2025, driven by strong performance in the agriculture, manufacturing, and services sectors. Over the medium term, growth is expected to average 4.6 percent, supported by the Feed Salone programme, increased mineral exports, and continued expansion of the services sector.

The external sector recorded a trade deficit of US$166.3 million in the third quarter of 2025, compared to a surplus of US$6.4 million in the preceding quarter. This was largely due to lower mineral export earnings and higher imports of machinery and capital equipment. Gross foreign exchange reserves remained adequate to cover two months of imports, following IMF disbursements under the Extended Credit Facility (ECF) programme. The exchange rate has remained relatively stable, reflecting improved confidence in the foreign exchange market.

On the fiscal front, the overall budget deficit widened to NLe 2.0 billion in the third quarter of 2025 from NLe 1.1 billion in the previous quarter, mainly due to lower revenue and a slight increase in expenditure. However, the primary balance remained in surplus, supported by ongoing fiscal consolidation efforts and improved debt management practices.

Reserve Money and Broad Money expanded during the third quarter, driven mainly by growth in net domestic assets. Despite this expansion, Reserve Money remained within the quarterly target, consistent with the Bank’s objective of maintaining price stability. Credit to the private sector slowed to 2.92 percent from 3.57 percent in the previous quarter, reflecting cautious lending by commercial banks amid tighter credit risk management and prudential enforcement.

The MPC noted that the banking sector remains broadly stable and adequately capitalised, although rising non-performing loans, cybersecurity threats, and cases of fraud pose potential risks. The Committee referenced the Bank’s recent decision to place Union Trust Bank into resolution, in line with the Bank of Sierra Leone Act 2019 and the Banking Act 2019, as part of efforts to safeguard financial stability under the IMF ECF programme.

In view of declining inflation, exchange rate stability, and a resilient financial system despite ongoing global uncertainties the MPC concluded that a carefully calibrated easing of monetary policy is appropriate to support private sector investment and economic activity.

Accordingly, in addition to reducing the Monetary Policy Rate to 16.75 percent, the Committee approved a one percentage point reduction in both the Standing Lending Facility Rate and the Standing Deposit Facility Rate. Effective December 19, 2025, the rates are as follows:

  • Monetary Policy Rate (MPR): 16.75 percent
  • Standing Lending Facility Rate (SLFR): 20.75 percent
  • Standing Deposit Facility Rate (SDFR): 11.25 percent

The Bank of Sierra Leone stated that it will continue to closely monitor domestic and global developments and stands ready to adjust its policy stance as necessary. The next MPC meeting is scheduled for March 26, 2026.

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