By Tabora Bojang
Diaspora remittances continue to play an important role in The Gambia’s economy surging to a new peak of US$476.01 (D24 billion) in the first seven months of the year 2021.
The Central Bank said this represents 80.7 percent of total remittances recorded in the previous year of 2020.
Governor Buah Saidy told a monetary policy committee press briefing on Wednesday that the diaspora community has greatly assisted the economy with increased remittance inflows which supported the stabilisation of the dalasi.
“Diaspora remittances continued to be the main source of foreign exchange inflows in the domestic foreign exchange market during the review period. Total remittance inflows rose by 78.8 percent to US$589.81 million in 2020 from US$329.79 million in 2019. As at end July 2021, remittance volume surged to US$476.01 million representing 80.7 percent of the total remittance recorded in 2020,” Governor Saidy added.
The new surges in the remittance inflows could not have come at a better time when the Gambian economy is witnessing serious contractions in revenue and grants due to the Covid-19 pandemic.
The governor revealed that the volume of transactions in the foreign exchange market increased to $2.4 billion in the 12 months to the end of June 2021 from US$2.1billion a year ago.
However he also disclosed that year on year, the dalasi moderately depreciated against all major trading currencies except for the US dollar.
“It weakened against the euro, pound and CFA by 8.3 percent, 11.1 percent and 8.1 percent respectively but strengthened against the US dollar by 0.6 percent,” he added.
Domestic debt increases
According to the country’s apex bank the outstanding domestic debt stock increased to D36.5 billion in the first eight months of 2021 relative to D33.5 billion in the comparative period in 2020.
Governor Saidy also reported that security yields on the domestic debt market continue to trend downwards from a year ago in line with the expansionary monetary policy stance of the Bank.
The yields on the 91-day, 182–day and 364-day treasury bills decreased to 2.28 percent, 2.25 percent, and 2.97 percent respectively at the end of August from 3.57 percent, 5.50 percent and 8.52 percent in the same period of 2020.
The bank also reported that near-term forecasts suggested that inflation peaked at 8.2 percent in July 2021 from 7.6 percent in January 2021, adding that the main drivers of the food inflation were rice, vegetables, oil and fats, sugar, jam, honey, sweets among others.
“Consumer price inflation has been on an upward trend reflecting a peak up in global food prices and domestic structural bottlenecks. Headline inflation peaked at 8.2 percent in July 2021 from 4.8 percent in the corresponding period a year ago, attributable to increase in food prices. Consumer price inflation on food and non alcoholic beverages accelerated to 11.5 percent during the review period compared to 5.2 percent a year ago.