By CentralBankNews.info
Gambia’s central bank left its monetary policy rate steady at 12.50 percent, saying risks to domestic inflation had subsided since February while inflation expectations are well anchored, and the exchange rate of the dalasi is projected to remain broadly stable, supported by market confidence and improved supply.
The Central Bank of The Gambia (CBG) cut its rate by 100 basis points in February due to declining inflation and to continue its support of private sector growth. It also increased the reserve maintenance period to 2 weeks to give commercial banks more flexibility in liquidity management.
Since May 2017 the central bank has lowered its key rate by 750 basis points as inflation has steadily decelerated since almost 9 percent in January that year.
In April Gambia’s headline inflation rate rose to 6.9 percent from 6.1 percent in March due to a one-off increase in postal charges as food inflation decelerated to 6.3 percent, reflecting a stable exchange rate and moderate global food prices.
The central bank’s core measure of inflation, which strips out utility, energy and volatile food, eased to 6.0 percent in April from 6.6 percent in April 2018.
CBG targets inflation of 5.0 percent.
Gambia’s economy rebounded strongly last year, with growth estimated of 6.5 percent compared with 4.8 percent in 2017, driven by the services sector, including tourism and trade, financial services and insurance, transport and telecommunications. Agriculture also recovered to slow 0.9 percent after shrinking 4.4 percent in 2017.
Although delayed rain fall, flooding and long dry spells continue to affect crop yields, CBG said early data show that growth will remain robust in 2019, helped by support from its development partners, higher remittances, tourism and foreign direct investment.
Gambia’s foreign exchange market is functioning smoothly, the bank said, saying the volume of transactions had risen to US$638.5 million in the first quarter, up 25.7 percent from fourth quarter 2018.
The dalasi’s exchange rate is also broadly stable, rising against pound sterling, euro and the CFA from April 2018 to April 2019, but against the U.S. dollar is was down by 4.8 percent.
