By Tabora Bojang
Governor Buah Saidy of the Central Bank yesterday reported from the monetary policy committee’s quarterly meeting that the aggregate purchase and sale of foreign currency in the domestic foreign exchange market stood at $563 million in the second quarter of 2024 compared to $600.9 million reported in the first quarter, adding that this decline in activity volumes is largely owing to the lean period in tourism activities and drop in remittances.
The governor further disclosed that the total private remittance inflow, which is the largest source of foreign currency supply, slightly moderated by 1.6 percent in the second quarter of 2024 to stand at $200.9 million compared to $204.2 million registered in the first quarter.
State of the economy
On the state of the economy, the governor said the monetary policy committee has noted the strong performance of the Gambian economy with this year’s growth expected to average 5.7 percent and that a rebound in the tourism activity, public and private sector investments and stable remittance inflows will continue to support economic growth.
With the anticipated cooling of global commodity prices and better cropping season, he said, inflation is forecast to continue declining towards the CBG’s target of 5 percent.
Dalasi depreciation
However, the governor did not have good news on the strength of the dalasi against foreign currencies in the period under review.
He said between March to June this year, the Gambian currency depreciated against major trading currencies, with the CFA being the highest, at 3.9 percent, the US dollar by 0.5 percent, the euro,1.2 percent and the Pound Sterling by 1.2 percent
He explained: “Most of the things we use in this country are imported from Senegal as reflected in our balance of payment and a lot of capital development projects going on in the country which require the use of cement, basalt and other materials most of which are imported from neighboring countries including Senegal and it is the CFA that is needed to make those purchases. Also, because of the challenges at our ports some of our imported items are dropped at the port of Dakar and we pay those transactions in CFA. There are also Senegalese immigrants living and working in the Gambia and they send their earnings back to Senegal. So, the demand for the CFA is high and so what we need to do as a country to reverse this trend is to work and increase agriculture and export some products to earn foreign currency,” Governor Saidy said.
Meanwhile the monetary policy rate is maintained at 17 percent and the required reserve ration of banks is at 13 percent. The interest rate on the standing deposit facility at 3 percent and the interest rate on the standing lending facility at 18 percent.
