An economist at one of the country’s leading consultancy firms, has lauded the Central Bank of The Gambia and its governor for cutting interest rate.
During the presentation of the Monetary Policy Committee third quarterly report of the year on Thursday, Governor Buah Saidy announced the cutting of the Monetary Policy Rate (MPR) by 100 basis points to 16 percent.
Speaking to The Standard yesterday, the economist who preferred non-disclosure of his identity stated: “It is important for your readers to know what a cut to the MPR means for the economy. When the Central Bank of The Gambia cuts the MPR, which is the key interest rate the Central Bank will set to determine the market interest rates, it allows commercial banks to lend to their customers, especially businesses, at a lower interest rate. A business, for example, that plans to expand, but constrained by access to finance, can now borrow from its bank at a lower rate. An expanded business can lead to employment opportunities, better services, and products. The ripple effects are more business activities, employment creation, better goods and services, and improved standards of living.
Also speaking to The Standard, Sulayman Darbo, the media and communication officer at the apex bank told this paper: “The fact that the MPC has kept the MPR at 17% for the past two years in its fight against inflation, and the fact that inflation has been contained in single digits for eight straight months, coupled with the fact that global inflation outlook is trending downward, the MPC, chaired by the Governor, Honorable Buah Saidy, took the decision to slightly release the breaks on tightening access to finance to fight inflation, a tap on the gas pedal of loosening to spur investment and growth. The expectations are increased business activities, job creation, and improved productivity.”
However, Mr Darbo noted: “There are certain realities that cannot be ignored in dealing with inflation in the current national, regional, and global economic environment. These realities are recognised by Dr Foday Joof in his article, “Will The Gambia’s inflation return to its 5% medium term target? A Question That Still Echoes” as follows: increase domestic production, especially basic goods such as rice and vegetables; boost the foreign reserves; and encourage competitiveness in the market that could lead to better prices for consumers. A reduction in the MPR therefore is a sign of hope for the economy, because it encourages investment, especially for businesses, by creating the opportunity to access loans at reduced interest rates.”
Mr Darbo, a former journalist said Central Bank’s Business Sentiment Survey for the third quarter of 2025 showed rising optimism among firms regarding the near-term outlook for the Gambian economy with the majority of respondents anticipating further improvements in economic conditions in the fourth quarter.
He said the dalasi remains broadly stable during the year and that the Central Bank continues to maintain a strong external reserve position to safeguard the economy against external shocks.
