Sierra Leone’s Minister of Finance Ahmed Fantamadi Bangura has revealed that the Bank of Sierra Leone (BSL) is committed to taking decisive actions to bring inflation down and stabilize the exchange rate.

In a statement presented to Parliament, Bangura outlined a number of measures that the BSL will take to achieve these goals. These measures include:

  • Sustaining a tight monetary policy stance by continuing to raise the monetary policy rate. This will help to reduce the amount of money in circulation, which in turn will help to lower inflation.
  • Developing a framework to introduce BSL-owned instruments to support effective liquidity management operations. This will help to ensure that the BSL has the tools it needs to manage the money supply and stabilize the exchange rate.
  • Improving communication to explain monetary policy decisions, past outcomes, and actions necessary to align inflation expectations with policy objectives. This will help to ensure that the public understands the BSL’s actions and supports its efforts to achieve its goals.

In addition to tightening monetary policy, the BSL will also take the following actions to stabilize the exchange rate:

  • Continuing to remove restrictions on foreign exchange transactions and simplify the rules of the interbank foreign exchange market. This will help to make it easier for businesses and individuals to buy and sell foreign exchange, which will help to stabilize the exchange rate.
  • Enforcing the requirement to repatriate a minimum of 30 percent of export value into the banking system by exporters of minerals, agricultural, fisheries, forestry and forestry products. This will help to increase the supply of foreign exchange in the domestic market, which will help to stabilize the exchange rate.
  • Recommencing the purchase of gold to help build foreign exchange reserves. This will help to provide a buffer against fluctuations in the exchange rate.
  • Monitoring compliance with its directives to offshore foreign exchange brokers to trade donor funds for development projects in Sierra Leone at the daily reference market rate (BSL mid-rate). This will help to ensure that donor funds are not being used to speculate on the exchange rate.
  • Requiring all disbursements for donor-funded projects to be channeled through the Bank of Sierra Leone. This will help to ensure that donor funds are not being used to purchase foreign exchange on the black market.

The BSL’s actions are a welcome step towards addressing the challenges of inflation and exchange rate instability. These challenges have been a major concern for businesses and individuals in Sierra Leone, and the BSL’s actions will help to create a more stable and predictable economic environment.

In addition to the BSL’s actions, the government is also taking steps to address the underlying causes of inflation and exchange rate instability. These steps include:

  • Increasing domestic production of goods and services. This will help to reduce reliance on imports, which will help to reduce demand for foreign exchange.
  • Investing in infrastructure development. This will help to improve productivity and competitiveness, which will help to boost economic growth.
  • Creating a more conducive environment for business investment. This will help to attract foreign investment, which will help to create jobs and boost economic growth.
  • The government’s actions are complementary to the BSL’s actions, and together they will help to create a more stable and prosperous Sierra Leone.