Friday, October 28, 2011

Sierra Leone Central Bank Cuts Rate 300bps to 20.00%

The Bank of Sierra Leone cut its monetary policy rate by 300 basis points to 20.00% from 23.00% previously; also changing the Reverse Repo Rate to 22.00%, Rediscount Rate to 24.00%, and Standing Facility Rate at 27%.  The Bank said: "The MPC discussed the appropriateness of the Bank's monetary policy stance in light of observed tight liquidity in the money market. It noted that with the growth of Reserve Money within its 2011 program target and inflation trending downwards, the Bank has some leeway to ease the tight liquidity condition in the money market. The MPC also noted the efforts being made by the fiscal authorities in public expenditure management to support the Bank's monetary policy."

The bank of Sierra Leone previously held the monetary policy rate unchanged at 23% at its August and June meetings this year, where it increased the standing facility rate by 300bps to 30%.  Sierra Leone reported an annual inflation rate of 15.7% in September, down from 16.4% in August, 16.8% in July and June, 17.8% in May, and 15.4% in April, and up from the 12.5% rate experienced during 2010.

Finance Minister, Samura Kamara, previously said GDP growth is expected around 5.5% during 2011, compared to IMF statistics which reported the Sierra Leone economy as growing 4.77% last year.  Sierra Leone's currency, the Sierra Leonean leone (SLL), has weakened by about 7% against the US dollar so far this year, and the USDSLL exchange rate last traded around 4,420


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