The Bank of Sierra Leone has announced a hike in the Monetary Policy Rate (MPR) by 2 percentage points, increasing it to 21.25 percent.
This decision was revealed in a recently published document following a meeting of its Monetary Policy Committee (MPC) on 28 September 2023. The meeting was chaired by the Acting Governor, Dr. Ibrahim L. Stevens.
The document noted, “After an assessment of recent macroeconomic and financial developments in the global and domestic economy and the implications for domestic inflation and growth, the MPC decided to raise the Monetary Policy Rate (MPR) by 2.0 percentage points, to 21.25 percent.”
In explaining the rationale behind this decision, the Bank of Sierra Leone pointed to several factors. Global economic developments, inflation rates, domestic economic activities, fiscal development, as well as the state of money, banking, and financial system stability were all cited as significant considerations that influenced the monetary stance.
The document went on to emphasize the challenges of inflation, stating, “Inflation remains a serious and persistent challenge and there are upward risks to the outlook for inflation. These risks include further hikes in fuel and transportation costs, exchange rate depreciation, expansion in monetary aggregates, the continuous rise in the price of imported commodities, and inflation expectations. Given these risks and the level of persistence, the MPC is of the view that the stance of monetary policy going forward has to be contractionary (tight) over the next few quarters.”
More on this document could be read below: