But, concerns have been raised about the rate at which the dalasi is dwindling in value against major currencies like the US Dollar and the British Pound |
The CBG has raised by two per cent (to 12 per cent) the
amount of money that commercial banks can hold as reserve to curb rising
inflation.
However,
it admitted the Gambian dalasi has continued to face depreciation pressures.
The
Gambia’s currency, the Dalasi, stood at 36.50 for one dollar on Saturday –
rising to 38.50 in some quarters in the foreign exchange market on Monday, The
Voice observed.
IMF’s
Mission Chief to The Gambia, David Dunn, said although inflation has picked up
during 2013, it is projected to stabilize at around 5 percent a year by 2014.
“In
the mission’s view, reducing Government’s net domestic borrowing further during
this period will be critical to ensure confidence,” he said at the end of a
June 4-17 discussions for the 2013 Article IV consultations.
All
other things being normal, the IMF reiterated that the economy is “still
recovering” from the severe drought of 2011.
Last
year, real growth in Gross Domestic Production, GDP, the total value of goods
and services produced by the country annually, is estimated to have been just
over 5 percent - driven by a strong performance in tourism and a partial
rebound in agriculture, according to the IMF.
But,
concerns have been raised about the rate at which the dalasi is dwindling in
value against major currencies like the US Dollar and the Pound Sterling, and
the general state of the country’s economy.
Opposition
leader Ousainou Darboe called it worrisome – the continuous depreciation of the
local currency. “Businesses are failing, even small enterprises are failing
because they can no longer sustain the economic hardship, and therefore, the
country’s economy is declining and it is declining fast,” the leader of the
United Democratic Party argued.
On
June 18, the IMF endorses the authorities’ tight monetary stance and decision
to refrain from the CBG’s financing of the fiscal deficit. This will likely
lead to higher Treasury bill yields, which should also help stabilize the
dalasi, it said.
A
statement issued on Friday by President Jammeh’s Office “noted with concern”
the recent depreciation of the dalasi against major international currencies.
It warned business owners in the country against hoarding foreign currencies,
and that measures are being implemented to reverse this “undesirable
situation”.
On
May 27, the CBG announced it has raised by two per cent (to 12 per cent) the
amount of money that commercial banks can hold as reserve to curb rising
inflation.
That
directive also noted it would address the amount of cash commercial banks must
not loan out to customers.
The
Bank’s Monetary Policy Committee, MPC, said the higher the reserve
requirement is set, the less cash banks will have to loan out, leading to lower
money in circulation.
This
is intended to withdraw excess Dalasi liquidity out of the economy and thus
help preserve price stability, the MPC explained.
Written by Modou S. Joof
Follow on Facebook: The-North-Bank-Evening-Standard
You ought to be a part of a contest for one of the highest quality websites on the net.
ReplyDeleteI will highly recommend this site!
Stop by my blog :: Online Home Careers Review