By Maimuna Sey Jawo
The Monetary Policy Committee (MPC) of the Central Bank of The Gambia (CBG) last Thursday reviewed developments in the country’s exchange rate including government’s fiscal operations.
Bakary K Jammeh, the governor of Central Bank, explained that the foreign exchange market continues to function smoothly, adding that from January to July 2019, volume of transactions measured by the aggregate of purchases and sales of foreign currency increased by 14.0 percent to US$1.3 million.
He said during the period, purchases of foreign currency, which indicates supply, increased to US$666.7 million, or by 14.4 percent, and that sales of foreign currency rose by 13.6 percent to US$662.6 million in the same period.
“The exchange rate of the dalasi remains broadly stable supported by market confidence, and increased inflows from private remittances, higher receipts from tourism, and official inflows from development partners.
“From December 2018 to July 2019, the dalasi appreciated against the pound sterling and euro by 0.6 percent and 1.2 percent respectively.
However, it depreciated against the US dollar by 0.9 percent and CFA by 1.2 percent,” he stated.
He highlighted that preliminary data on government fiscal operations for the first six months of 2019 indicated that total revenue and grants stood at D8.6 billion (9.8 percent of GDP) compared to D6.9 billion (8.6 percent of GDP) in the same period last year.
He said domestic revenue, comprising tax and non-tax revenues, rose by 23.9 percent to D5.7 billion (6.5 percent of GDP) from D4.6 billion (5.8 percent of GDP) a year ago.
“Tax revenue also rose by 23.7 percent to D5.2 billion (5.9 percent of GDP) in the first half of the year from D4.2 billion (5.3 percent of GDP) in the corresponding period a year ago.
“Total expenditure and net lending declined by 4.0 percent to D8.8 billion (10.0 percent of GDP) from D9.2 billion (11.5 percent of GDP) a year ago. The budget deficit, including grants narrowed to D0.19 billion (0.2 percent of GDP) in the first six months of 2019 compared to a deficit of D2.3 billion (2.8 percent of GDP) in the corresponding period a year ago.
The budget deficit, excluding grants also improved to a deficit of D3.1 billion (3.5 percent of GDP) in the first six months of 2019 compare to a deficit of D4.5 billion (5.7 percent of GDP) in the corresponding period a year ago,” he explained.